From Fortune: 2024-04-06 15:02:00

Elon Musk’s xAI startup is seeking $3 billion in funding, potentially valuing it at $18 billion, in a bid to compete with rivals like OpenAI and Anthropic. Investors including Steve Jurvetson and Gigafund are in talks to back the AI firm, part of the growing “arms race” in the industry.

xAI, founded by Musk as a competitor to OpenAI, recently launched its own chatbot named Grok. With news of a potential $3 billion funding round, the startup is ramping up its efforts to secure additional capital, as rivals OpenAI and Anthropic have secured major commitments from tech giants like Microsoft and Google.

The battle for AI talent is intensifying, with companies like xAI, OpenAI, and others competing for a limited pool of highly skilled workers. Musk’s xAI recently attracted Tesla engineer Ethan Knight, sparking a talent war in the industry. High salaries and benefits are being offered to entice top AI professionals.

According to reports, the median salary at OpenAI is $925,000, including bonuses and equity, as companies are willing to pay top dollar for AI expertise. The demand for AI talent is high, with a McKinsey report indicating that many gen AI creators and heavy users are planning to leave their current roles in the next few months.

In a bid to retain top AI employees, companies like Meta are facing a brain drain as high-level AI employees depart for other opportunities. Tech companies are actively recruiting AI talent, with CEOs like Mark Zuckerberg personally appealing to top engineers and researchers to stay on board.



Read more at Fortune: Elon Musk’s friends to help raise $3 billion for xAI