Elon Musk has offered xAI 25% of the shares to investors who support his $44 billion acquisition of Twitter (now known as X). xAI was founded last year to compete with companies such as OpenAI and Anthropic.
Insiders revealed that xAI will complete a new round of funding worth $5 billion as early as Wednesday, and its valuation has doubled in just six months to reach $50 billion. When the funding ends this week, xAI will have raised a total of about $11 billion to cover the huge expenses needed to build AI models and one of the world's largest supercomputer clusters.
This means that some of Musk's supporters can benefit greatly from xAI's shares, as the value of this startup has risen sharply, and these supporters lost billions of dollars when they acquired Twitter. Investors in both of Musk's companies who will benefit include Fidelity, Oracle co-founder Larry Ellison, Saudi Prince Alwaleed bin Talal, Twitter founder Jack Dorsey, and Silicon Valley venture capital firms Sequoia Capital and Andreessen Horowitz (a16z).