Elon Musk’s artificial intelligence startup could get a giant boost as xAI struggles to meet up with rivals like OpenAI and Anthropic within the highly competitive space.
Investors near the CEO of Tesla and SpaceX are in talks to assist xAI raise $3 billion in a funding round that may very well be valued at $18 billion. Sources told Dem Wall Street JournalAccording to which Steve Jurvetson and the enterprise capital company Gigafund are among the many potential backers.
Jurvetson is a friend of Musk, who sits on the board of SpaceX and previously sat on the board of Tesla. Gigafund co-founder Luke Nosek is now also on the board of SpaceX and, along with Musk, a part of the so-called “PayPal Mafia”. diary.
xAI representatives didn’t immediately respond Fortune’s I asked for comment on Saturday and didn’t respond Magazines Request late Friday.
Musk launched xAI last 12 months as a rival to ChatGPT parent company OpenAI, which he co-founded but later sued after it claimed it was abandoning its original nonprofit mission. In November, xAI launched its own chatbot called Grok and released an updated version last month.
News of the potential $3 billion funding round is the newest sign that xAI is searching for more capital, while rival OpenAI has a $13 billion commitment from Microsoft and Anthropic has raised $6 billion, amongst others from the backers Google and Amazon.
In January the Financial Times reported that Musk wanted to lift as much as $6 billion for xAI, although he later disputed that he was collecting donations. And in December, a regulatory filing showed that xAI was trying to raise $1 billion from investors and had already secured nearly $135 million.
As the race to support investors in the bogus intelligence space heats up, xAI and its competitors are also competing for AI talent. After it was announced on Wednesday that Tesla’s Ethan Knight became the owner of the automotive manufacturer fourth engineer To join xAI, Musk tweeted that Knight planned to maneuver to OpenAI.
“It was either xAI or her” Musk wrotenoticed that he was too increase the payment of AI engineers. “[OpenAI has] is aggressively recruiting Tesla engineers with massive compensation offers and [has] unfortunately successful in some cases.”
He later added: “The AI talent war is the craziest talent war I’ve ever seen!”
Tech corporations are struggling to compete for the limited pool of staff with deep AI experience. In fact, there may only be a number of hundred people on this planet with highly expert skills in training large language models and troubleshooting latest AI platforms, says Naveen Rao, head of generative AI at Databricks, told that Wall Street Journal Last month.
The costs of attracting and retaining such in-demand skills are high. Data from profession service platform Levels.fyi shows that the common salary at OpenAI is $925,000, including bonuses and company equity.
Such sky-high compensation comes like a March report McKinsey found that about 51% of genetic AI developers and heavy users say they plan to quit inside the following three to 6 months, in comparison with 34% of staff overall who say they plan to quit inside the same period to stop.
At Facebook parent company Meta, no less than three high-ranking AI employees have left the corporate in recent weeks. This includes computer scientist and Senior Director of Engineering Erik Meijer, who told the story Assets In an exclusive interview, he said he had turned down “outstanding offers” from several of the “most in-demand” AI corporations.
To prevent such brainpower from leaving the ship, CEO Mark Zuckerberg has even reportedly began courting leading AI engineers and researchers with personal appeals.
