SpaceX (SPACE, Financial), the rocket company owned by Elon Musk, is investing $2 billion in his artificial intelligence firm, xAI. This marks SpaceX's first public financial support for xAI and one of its largest external investments. The funding represents nearly half of xAI's $5 billion equity financing round, led by Morgan Stanley, which was completed last month. As xAI competes with major AI firms like OpenAI, Musk is leveraging his company's resources to accelerate xAI's growth.
Earlier this year, Musk merged xAI with X (formerly Twitter), creating an entity that combines a social media platform with an AI research lab. This move has expanded the distribution potential of xAI's chatbot, Grok, and increased the new company's valuation to $113 billion.
Despite its advancements, Grok faces challenges in user growth compared to rivals like ChatGPT and has been criticized for generating offensive content. xAI has apologized and taken corrective measures. Grok is already utilized in Musk's other ventures, such as providing technical support for SpaceX's Starlink satellite internet service.
Musk plans to integrate Grok into Tesla's humanoid robot, Optimus, further expanding xAI's applications within his business empire.
