In the Artificial Intelligence Race, Elon Musk Seeks $1 Billion for His xAI Startup

Jamie Bichelman - Author

Jan. 11 2024, Published 4:34 p.m. ET

Elon Musk speaks at the Tesla Design Studio in Hawthorne, California.
Source: Getty Images

Though Elon Musk has firmly positioned himself against emerging artificial intelligence technologies in the past, he is now seeking $1 billion in capital for his own rival startup, xAI. As a co-founder of OpenAI, per Axios, Musk is well-acquainted with the seemingly limitless potential of the technology and the massive financial gains to be had, per Bloomberg.

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The source of much excitement for Musk, the venture was launched in July 2023, per CNBC, and the goal is to build "artificial intelligence to accelerate human scientific discovery," per the xAI website. Here's what we know about xAI, and how the public can potentially buy stocks to invest in the company.

Elon Musk smiles onstage during The New York Times Dealbook Summit 2023 in New York.
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Can you buy stocks in Elon Musk's AI startup xAI?

As of publication in January 2024, the public cannot buy stocks in Elon Musk's xAI.

Any announcement from Musk inevitably attracts legions of fans seeking to get involved — despite the billionaire's many controversies. Thus, after Musk launched xAI in the summer of 2023, many were left wondering if they could buy stocks in the AI startup.

As it turns out, Musk clarified on social media that he is not raising money for xAI, per The Guardian. This was a particularly curious declaration, given that Musk's filings with the Securities and Exchange Commission (SEC) revealed $135 million raised for the company thus far, and an additional $1 billion he is seeking in equity, per CNBC.

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In November 2023, Musk announced another loophole of sorts to get more people involved in the xAI startup, tweeting that "X Corp investors will own 25 percent of xAI." As of January 2024, xAI is not a publicly traded company, and thus, is not available for fans to buy stocks.

It should be noted that XAI Corp., which is a digital currency available for trade on Coinbase, is not owned or operated by Musk. Rather, the "memetoken" is an homage to Musk's work in artificial intelligence.

Elon Musk attends the Viva Technology conference in Paris, France in 2023.
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Elon Musk's xAI is trying to raise $1 billion.

Musk filed with the SEC his intent to raise $1 billion, on top of the $135 million he'd raised up to that point.

The desire to seek investors for his xAI startup is on par with other major tech companies investing billions in AI companies. Per The Guardian, Microsoft and OpenAI announced an investment worth $10 billion; Amazon invested $4 billion in the AI race, per additional reporting from The Guardian; and another Microsoft-backed AI startup raised more than $1 billion from multiple investors, per Reuters.

In Section 9 of the SEC filing, Musk checked "equity" for the type of securities offered. According to the investment and banking firm Charles Schwab, the most common equity security is a stock. "If you own an equity security, your shares represent part ownership of the issuing company," per the article.

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Translation: Equity securities equal part ownership in a company. Thus, while xAI is not yet a publicly traded company, the SEC filing hints that Musk is seeking others to purchase shares of the company, equivalent in this particular case to $1 billion.

Elon Musk's xAI logo is seen on a telephone with a white background, against a blue and white collage of colors behind the phone.
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What exactly does Elon Musk's startup xAI seek to do?

Musk and his merry men of tech seek "to advance our collective understanding of the universe," per the xAI website. To that end, Musk has brought onboard veterans of artificial technology, including those from OpenAI and Microsoft, per CNBC.

In order to better "understand reality" as Musk declared when the startup was first announced, he set out to build an AI company that is better-aligned with his view of how AI should be implemented; per TIME, Musk has been critical of OpenAI since departing the company in 2018.

In November 2023, xAI announced the launch of Grok, a clear rival to ChatGPT. It promises to "answer spicy questions that are rejected by most other AI systems," according to the xAI website.

Sourcing real-time information from X (formerly Twitter), users interested in testing the accuracy of Grok's answers on everything from dating advice to math homework can join the wait list here.

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