Reportedly in early negotiations to raise a fresh fundraising round valued at $40 billion, Generative AI startup xAI, backed by Elon Musk, could be valued at $40 billion according to The Wall Street Journal. This is a significant bump from its $24 billion valuation in May, when xAI received $6 billion in its series B financing.

The ongoing debates point to xAI's aspirations to quickly dominate the AI market, where it faces direct competition from OpenAI. OpenAI valued itself at $157 billion by raising $6.6 billion earlier this month. Musk, who co-founded OpenAI but departed in 2018, has been outspoken critic of his previous business.Musk revealed intentions to quadruple xAI's scale at the Future Investment Initiative conference in Riyadh, without mentioning the financing specifics. Pricing $5 per million input tokens and $15 per million output tokens, xAI has unveiled its first application programming interface (API) called "grok-beta."

After an online survey indicated strong popular support for the concept, Musk also suggested that he would suggest to Tesla Inc. (TSLA, Financial) that the firm fund $5 billion into xAI. XAI has not published any formal remarks on these advancements.