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Well-known venture capilists are poised with at least six billion dollars to invest in xAI, a company owned by Elon Musk.

According to the Financial Times, investors would value the company at eighteen billion dollars.

The parties that have pledged capital so far include: Lightspeed Venture Partners, Andreessen Horowitz, Sequoia Capital and Tribe Capital. Family offices and government funds have also been asked to participate.

The funding round is not yet closed. The English business newspaper knows from a source that interested investors who asked critical questions about Musk's activities at his other companies were shown the door.

xAI was founded in March 2023. Elon Musk had been active in the field of AI for years at the time through his Tesla car company, which works with image recognition. xAI has the specific mission "to understand the true nature of the universe.

Since its launch last year, it released a chatbot, Grok, based on a language model. That is also what OpenAI, Google, Facebook, Mistral and Anthropic are founded on. To investors, Musk says he can draw on inputs from his other companies for the digital raw materials of his language model, for example text from Twitter, images from Tesla and perhaps neurodata via Neuralink.

The purpose of the billions of venture capital is not clear, but it is obvious that xAI will want to buy a lot of AI chips. Musk has ten thousand now, but wants to scale up to a hundred thousand as soon as possible.

There are seventeen current job openings at the company, including one in London.

Googles ex-CEO Eric Schmidt questions whether and how lenders think about return on capital in the immense funding rounds described here.

McKinsey research shows that office automation with AI-like tools will eliminate 30 percent of the world's hours worked by 2030.

Photo: Mirza Babic, Unsplash

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