Why is Musk's xAI Pursuing Additional Funding After Increasing Corporate Value Fourfold in 7 Months?

【Silicon Valley=Hong Chang-gi Correspondent】



Elon Musk's Tesla CEO's artificial intelligence (AI) startup xAI is pursuing funding under the condition of valuing the company at up to 200 billion dollars (about 276 trillion won). This is because xAI needs additional capital as competitors like OpenAI, Meta Platforms, Google, etc., are putting their lives on the line in the AI model development competition.
On the 11th (local time), the Financial Times (FT) quoted sources saying that xAI's funding could take place as early as next month.
The Saudi Arabian Public Investment Fund (PIF) is playing a role in xAI's current funding. PIF is indirectly investing in xAI through its stake in Kingdom Holding Company, which invested 800 million dollars in xAI.
xAI's corporate value was evaluated at 50 billion dollars (about 69 trillion won) during the investment attraction last November. If xAI's corporate value is evaluated at the level of 200 billion dollars in this funding, which is less than a year later, it means the corporate value has quadrupled. The rise in xAI's corporate value shows that xAI's competitiveness in the AI market is being proven.
Musk announced last March that the social media (SNS) company X (formerly Twitter) he owns was acquired by xAI for 33 billion dollars, stating that through this transaction, xAI was evaluated at 80 billion dollars (about 110.4 trillion won).
According to investment bank Morgan Stanley, apart from this funding, xAI raised funds through the issuance of collateralized bonds and loans amounting to 5 billion dollars at the end of last month. Additionally, it received a separate strategic equity investment of 5 billion dollars.
xAI is aggressively pursuing additional funding because the AI competition is progressing rapidly, and xAI is quickly depleting the funds it has raised so far. xAI is spending large amounts of capital on building data centers equipped with AI chips. 
xAI is also continuously introducing the latest AI models to avoid falling behind in this competition.
On the 9th of this month, it released the latest AI model 'Grok4'. Musk introduced Grok as the most entertaining AI in the world. Additionally, it launched a high-priced AI subscription service 'SuperGrok Heavy' costing 300 dollars per month. Furthermore, xAI plans to release an AI coding model next month, a multimodal agent in September, and a video generation model in October, with the strategy of not falling behind in the AI competition with OpenAI and Google.





theveryfirst@fnnews.com Hong Chang-gi Reporter