Elon Musk's xAI Seeks $1 Billion in Private Sale for Unreleased AI Chatbot Grok
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Modified on: Wed, 6 Dec, 2023 at 12:05 AM
Elon Musk's artificial intelligence modeler xAI, known for its unreleased chatbot Grok, has filed with the SEC for a private sale of $865.3 million in unregistered equity securities. The Form D filing outlines xAI's intention to raise $1 billion through a private sale, with accredited investors and restrictions on resale. The chatbot Grok, touted as having real-time knowledge via the X platform, is yet to make its public debut. This article explores the filing and the potential significance of xAI's fundraising for its upcoming AI product.
Elon Musk's artificial intelligence modeler xAI, known for its unreleased chatbot Grok, has initiated a private sale of unregistered equity securities, aiming to raise $1 billion. The Securities and Exchange Commission (SEC) filing, made on Dec. 5, reveals that $865.3 million in securities is earmarked for private sale to accredited investors. Elon Musk is listed as the executive officer and director of XAI.
The filing, made through the SEC's Form D, outlines xAI's intention to engage in a private sale of securities without registration. This approach aligns with Regulation D of the Securities Act of 1933, providing exemptions to standard rules. The securities, sold with restrictions on resale under Rule 506(b), are specifically targeted at accredited investors.
The filing indicates that $134.7 million in such securities have already been sold, with the initial sale occurring on Nov. 29. The total fundraising goal is set at $1 billion. The document does not provide detailed information about the use of the proceeds or the specific terms of the private sale.
xAI's flagship product, the chatbot Grok, is yet to be unveiled to the public, but there is an existing waitlist for the prototype. Described as a "very early beta product" on the website, Grok is touted to possess real-time knowledge of the world through the X platform, formerly known as Twitter. Notably, Grok is positioned to handle "spicy questions" rejected by most other AI systems.
Elon Musk introduced xAI in July with the ambitious goal of understanding the universe. Grok, set to outperform ChatGPT, became a point of contention in an online dispute between Musk and OpenAI's co-founder and CEO, Sam Altman, in November. Despite Musk's previous association with OpenAI as a co-founder, he left the organization.
The private sale of AI securities underscores the significant financial interest and investment in the development of AI technologies. As the fundraising progresses, attention will likely intensify on the anticipated public release of Grok and the potential impact of xAI's advancements in the artificial intelligence landscape.
(DEREK ANDERSEN, COINTELEGRAPH, 2023)
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