Elon Musk’s AI venture, xAI, has successfully garnered impressive investor commitments totaling $500 million, marking a significant stride toward its ambitious funding target of $1 billion.

According to Bloomberg’s reports, discussions surrounding the company’s valuation currently revolve around a substantial range of $15 billion to $20 billion. However, these terms could still change in the upcoming weeks according to the sources who chose to stay anonymous due to the confidentiality of the matter.

Among the notable investors contributing to xAI’s funding include prominent names such as Larry Ellison, Sequoia Capital, Andreessen Horowitz, Fidelity Management & Research Co., and Saudi Prince Alwaleed bin Talal. Collectively, these investors are poised to hold a significant stake in xAI, estimated at 25%, reinforcing the company’s position in the burgeoning AI landscape.

Insights from Bloomberg’s sources reveal that xAI is presenting a compelling opportunity for equity investors in X, offering them the potential to allocate at least 25% of their initial investment in X toward xAI. Interestingly, some investors are contemplating the acquisition of computing power as an alternative or supplementary investment option, demonstrating the versatility of investment choices being considered.

As the negotiation process unfolds, the final terms of this investment endeavor are anticipated to be fine-tuned and formalized in the ensuing weeks. Amidst this development, Elon Musk weighed in on the matter, dismissing Bloomberg’s reports with the statement, “This is fake news from Bloomberg,” though he refrained from specifying which aspect of the reports he found to be inaccurate.

Last year, Musk unveiled his new venture as a divergent path from OpenAI, a company he initially co-founded but eventually departed due to diverging views on monetizing the technology. The startup launched its first product, an AI chatbot Grok, which is uniquely developed by leveraging social media content from X, another platform under Musk’s ownership. This strategic integration enables Grok to utilize fresher data sources for its responses, setting it apart from its competitors in the chatbot arena.