Elon Musk Sets The Record Straight, Slams 'Fake News' On xAI Funding

Challenging the credibility of the information shared in a Bloomberg article, Elon Musk has rejected claims of his artificial intelligence (AI) company xAI securing $500 million (£393.24 million) from investors as part of its $1 billion (£802.35 million) fundraising goal.

Responding to an X (formerly Twitter) user, Musk stated: "This is simply not accurate." Replying to another user on the social media platform, he called the Bloomberg report "fake news".

Musk-led xAI, which adopted a for-profit benefit corporate structure last month, is currently in discussions for a valuation ranging between $15 billion (£11.78 billion) to $20 billion (£15.73 billion), according to a Bloomberg report.

The report claims the AI startup has already secured £393.24 million in commitments from investors and it is aiming for a total of £802.35 million. However, Musk has rejected this as fake news.

Sources told the publication that the company is aiming for a tender offer valued between $500 million (£393.24 million) and $750 million (£589.66 million). Moreover, they noted that the potential share price could be about $95 (£74.69) each.

xAI targeted by another wave of fake news

Despite the lack of an official confirmation from xAI, Bloomberg quoted sources about the ongoing discussions. Furthermore, the media report suggests investors and Musk could finalise the terms of the purported funding in the coming weeks.

A fast-growing trend among investors involves seeking a diversified investment structure rather than sticking to traditional equity ownership.

In line with this, the Bloomberg sources claim some of the parties involved in the negotiations are open to exploring other options than traditional equity shares, including computing power, as part of their investment in the AI startup.

To recap, Musk had denied a similar fundraising report for xAI back in December, which indicated the firm has secured $135 million (£107 million) from investors and wants to raise $1 billion (£802.35 million) via equity offering.

This piece of vital information was reportedly mentioned in the startup's filing with the United States Securities Regulator. Musk launched xAI in July 2023 in response to concerns about AI efforts by big tech companies.

The billionaire hasn't shied away from criticising major tech companies for their flawed safety measures in their AI initiatives. Notably, xAI wants to lock horns with top players in the industry including OpenAI, Google, Microsoft and Anthropic.

In November 2023, Musk unveiled xAI's first language model, Grok, which came under fire last month for using OpenAI codebase to train. "Don't worry, no OpenAI code was used to make Grok," Igor Babuschkin, an X user affiliated with xAI, clarified in his post.

Grok is trained on data from X and can access the social media platform in real time.