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AI Startup Roundup: Elon Musk’s xAI Looking to Raise up to $6 Billion

Also - a startup whose tech fixes broken AI systems and another that offers an AI platform that helps compliance teams

Ben Wodecki

January 29, 2024

3 Min Read
Letters XAI
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Musk’s AI startup looking to raise up to $6 billion

Elon Musk's AI startup is looking to raise up to $6 billion to compete with OpenAI.

FT reports that xAI has held discussions with family offices in Hong Kong, investors in Japan and South Korea, as well as Middle Eastern sovereign wealth funds, according to four sources.

Musk did not respond to the paper’s emails asking for comment but posted this comment on X (Twitter) after publication of the story: “XAI is not raising capital and I have had no conversations with anyone in this regard.”

However, FT said documents filed with the U.S. Securities and Exchange Commission last December showed that xAI is seeking $1 billion in funding – it has already raised $135 million.

Earlier this month, Musk refuted a Bloomberg report that xAI had raised $500 million to $1 billion, calling it “fake news.”

Musk’s AI startup developed Grok, a new AI chatbot set to rival ChatGPT but with fewer filters and an added flair of wit and sarcasm.

Musk has positioned xAI as a for-profit benefit corporation in Nevada, meaning it prioritizes being a benefit to society over its fiduciary duties to investors.

Funding news

AiDash

AiDash builds AI solutions to improve the resilience of critical infrastructure, spotting potential headaches like wildfires and extreme weather issues. Combining satellites with AI tools, AiDash’s solutions can spot risks to infrastructure before they damage the grid. It is based in the Silicon Valley area of San Jose, California.

Latest funding:  $50 million, series C

Lead investor: Lightrock

Other investors: SE Ventures, G2 Venture Partners, Benhamou Global Ventures, National Grid Partners, Edison International, Shell Ventures

Funding plans: Funds will be used to fuel growth, with AiDash planning to nearly double its team of 300 over the next two years. The company will also establish a European headquarters and continue to expand internationally to meet growing demand.

Norm Ai

New York-based Norm Ai is building a regulatory AI agent platform, designed to aid compliance teams. The AI platform’s agent-based system conducts compliance checks for businesses, identifying potential problems with regulation, enabling compliance teams to quickly understand the legal basis for a determination.

Latest funding: $11.1 million, seed round

Lead investor: Coatue

Other investors: Haystack Ventures, M13 Ventures, Basis Set Ventures, Expa Ventures, Atypical Ventures

OpenDialog

London-based OpenDialog is developing conversational AI for regulated industries like health care and insurance. Its tech is designed to automate complex business processes through natural conversation to make systems safe and compliant.

Latest funding: $8 million, series A

Lead investor: AlbionVC

Other investors: Dowgate Capital

Funding plans: New funds will be used to further R&D efforts as well as accelerate expansion into the U.S. market

Boomerang

Miami-based Boomerang offers a tech-powered service that collects, stores and returns lost valuables back to the owners.

Designed to automate the lost and found service, matching items with customer claims to save staff time from sifting through shelves.

Latest funding: $4.9 million, series A

Lead investor: LightShed Ventures

Other investors: GGV, GoldHouse, Harlo Capital, Dream Ventures, Lake Nona Fund, SeventySix Capital

Funding plans: Skyler Logsdon, co-founder of Boomerang, said the funds will fuel its growth and investment in its team and platform.

RagaAI

RagaAI is developing tools to diagnose flaws with AI systems. Founded by Gaurav Agarwa, a former ASIC manager at Nvidia, the startup just emerged from stealth. It is based in the San Francisco Bay area, in California.

Agarwal’s startup has developed a foundation model, RagaAI DNA, designed specifically for AI testing. The model powers the startup’s platform, which performs over 300 tests to automatically detect issues with systems, before diagnosing and fixing them.

Latest funding:  $4.7 million,  seed round

Lead investor:  pi Ventures

Other investors: Anorak Ventures, TenOneTen Ventures

Funding plans: RagaAI is putting the cash towards research and to grow its largely Bangalore-based team, Agarwal told Bloomberg.

About the Author(s)

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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