Elon Musk is in talks with some major investors from the Middle East to raise funds for his AI startup, xAI, aiming for a valuation close to $450 billion, nearly double the company's valuation a year ago.
According to insiders, xAI is in preliminary discussions with both new and existing investors to seek fresh capital to compete with OpenAI. OpenAI recently completed over $10 billion in debt and equity financing, while competitors like Anthropic and tech giants such as Google and Meta are also formidable.
Musk has approached investors from Qatar and Saudi Arabia for support and has also communicated with current investors like Sequoia Capital and Valor Equity Partners. Sources say that the $450 billion valuation has been discussed with investors, close to the valuation during the summer funding round. Valor is expected to play a leading role in this round of financing, with Sequoia Capital potentially participating, though these talks are still in the early stages and specifics may change.
Musk's relationship with Saudi Arabia soured in 2018 over his attempt to take Tesla private, sparking a public dispute with the Saudi sovereign wealth fund. However, Musk has been working to mend ties with Saudi Arabia in recent years, speaking at the Future Investment Initiative conference. Insiders say Musk mentioned the investment potential in xAI during talks with Saudi investors, who remain highly interested in AI investments.
Additionally, Musk has expressed his funding needs to investors from Qatar, whose sovereign wealth fund previously assisted in his acquisition of Twitter. Wealthy Gulf states like Qatar, Saudi Arabia, and the UAE aim to lead in AI, possessing abundant financial resources and energy.
Following the launch of OpenAI's popular chatbot ChatGPT in late 2022, the funding scale for AI startups has rapidly increased. AI startups attracted over 40% of US venture capital in the first half of this year. Meanwhile, startups building powerful language models face significant financial pressures, relying on wealthy investors, chip manufacturers, and cloud service providers to meet the financial and technical requirements for training models.
Key Points:
🌟 Elon Musk is negotiating funding with Middle Eastern investors, aiming for a valuation of up to $450 billion.
🤝 Target investors include those from Saudi Arabia and Qatar, as Musk seeks to restore relations with Saudi Arabia.
🚀 The funding boom for AI startups continues, with the market showing strong confidence in AI investments.
