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Elon Musk is refuting recent reports suggesting that his artificial intelligence (AI) venture, xAI, secured $500 million in funding commitments.

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Musk dismissed the information as inaccurate, stating on his social media platform X, "This is simply not accurate." 

There is widespread speculation about the billionaire's new company’s financial status and potential valuation.

Investors are currently in the process of finalizing terms with Musk. The current discussions are expected to conclude in the coming weeks. According to Bloomberg, some parties are exploring the option of obtaining computing power and/or equity shares in the venture.

xAI finalizing equity offering

Last December, Musk had stated that xAI was not raising funds, contradicting the startup's filing with the U.S. securities regulator to raise up to $1 billion in an equity offering. 

Elon Musk launched his latest venture in July of 2023, as a response to what he calls excessive censorship and inadequate safety measures in Big Tech's AI efforts. Positioned as an alternative to Microsoft-backed OpenAI, it aims to create a useful and safe AI that surpasses human intelligence.

The new tech company’s funding drive and potential valuation in the range of $15 billion to $20 billion is attracting attention from investors. Notable backers, including Larry Ellison, Sequoia Capital, Andreessen Horowitz, Fidelity Management & Research Co., and Saudi Prince Alwaleed bin Talal. All of those involved in Musk's $44 billion takeover of Twitter aka X, are expected to invest in xAI.

Despite the reported funding commitments, Musk has categorically denied the validity of the news, referring to it as "fake news."

All eyes on AI 

The startup has developed a chatbot named Grok, utilizing social media posts from Musk's platform X. Grok's advantage lies in accessing more current data for responses compared to its competitors. 

This funding saga follows Musk's contradiction of reports in December regarding xAI seeking $1 billion in equity funding. Despite the denial, the company had already secured nearly $135 million from four investors at that time, as per U.S. Securities and Exchange Commission (SEC) filings.

xAI introduced Grok to X Premium+ subscribers in December after limited user testing. The venture faced controversy when Grok was accused of copying OpenAI's codebase and mimicking responses from ChatGPT.

In addition to X, founder and CEO Elon Musk also owns SpaceX, Tesla, Starlink, Nueralink and the Boring Company. The billionaire once owned an interest in OpenAI when it was a start-up but sold it claiming the company was exceeding moral and ethical standards with artificial intelligence.