Elon Musk has hit out at reports that he’s gearing up for a formidable challenge against OpenAI with substantial financial backing.

Reports suggest that his competitor, xAI, is in discussions to raise up to $6 billion, aiming for a proposed valuation of $20 billion, according to the Financial Times.

Breaking news: Elon Musk’s xAI is in talks to raise up to $6bn. The billionaire’s artificial intelligence start-up has courted wealthy individuals and investors around the world in recent weeks, according to multiple people familiar with the matter https://t.co/kKaa7SEPp1 pic.twitter.com/TaFIKDEQD0

— Financial Times (@FT) January 26, 2024

Sources familiar with the matter have indicated that Musk has been engaging with family offices in Hong Kong and targeting sovereign wealth funds in the Middle East as potential sources of funding.

This new fundraising goal significantly exceeds the initial target of $1 billion that xAI had set just last month, as per a filing with the U.S. Securities and Exchange Commission.

But in a Tweet on X, Elon Musk refuted the reports, saying “xAI is not raising capital and I have had no conversations with anyone in this regard.

xAI is not raising capital and I have had no conversations with anyone in this regard https://t.co/KyjeqnW9eu

— Elon Musk (@elonmusk) January 26, 2024

Ambitious fundraising

xAI has managed to secure $135 million toward its fundraising objective.

Last week, Musk refuted claims that his xAI startup had already garnered $500 million in commitments from investors toward the $1 billion goal, asserting that such reports were inaccurate.

In November, xAI introduced its AI chatbot, Grok, which competes with OpenAI’s ChatGPT.

Grok is designed to respond to queries with humor and a touch of rebellion, with the company advising against its use “if you hate humor.”

While xAI’s valuation of $20 billion remains a fraction of OpenAI’s, it aligns closely with Anthropic’s valuation of $18 billion in the AI space.

Thriving AI

Despite a slowdown in overall startup funding, AI continues to thrive.

Global funding for AI startups reached $50 billion in 2023, marking a 9% increase from the previous year, according to market research firm Crunchbase.

This surge in interest from tech leaders underscores the growing importance of AI technology.