xAI was founded in 2023. During the process of raising up to $6 billion in funding for his startup company, Musk came into contact with investors who had previously supported his acquisition of Twitter (now X company). According to the Financial Times on Thursday (April 25th), the latest round of financing could mean that xAI's valuation will reach $18 billion.

Sequoia Capital, which had invested $800 million in Twitter, has confirmed its intention to invest in xAI, but the specific investment amount has not been disclosed.

Elon Musk's xAI Company Upgrades in AI Competition

Sequoia Capital's support for xAI is not surprising, as the Silicon Valley investment firm has been a long-term partner and investor of Musk.

In this hot emerging market, Musk's xAI company faces fierce competition from other AI companies. OpenAI and Anthropic are also disruptive startups, while tech giants like Meta (which announced a significant increase in AI spending this week) and Google are also in the competition.

In order to keep his company ahead in the competition, X company owner Musk has been acquiring chips needed for training AI models and hiring engineers and researchers, some of whom come from his other company, the electric vehicle manufacturer Tesla. The capital investment from Sequoia Capital and other investors will help accelerate the development of xAI's chatbot Grok, making its performance closer to that of its competitors.

Musk's involvement in the AI industry is not without controversy. He co-founded OpenAI in 2015, but left the board of directors in 2018 due to disagreements with CEO Sam Altman over research direction. Recently, Musk sued OpenAI and Altman, claiming that they violated the original mission of the startup company to build AI systems for the benefit of humanity. In response, OpenAI called the lawsuit "baseless" and sought its dismissal.