Two dozen venture capital firms and other investors have plans to buy about $250 million worth of shares in xAI, the artificial intelligence and social media company controlled by Elon Musk, according to internal documents seen by The New York Times.
Current and former employees of xAI, which acquired the social media company X in March, could sell a portion of their shares to investors including TPG, ARK Invest and Sequoia Capital under a deal known as a tender offer, according to the internal documents. Fidelity, a previous investor in Mr. Musk’s companies, plans to purchase $20 million worth of shares in the deal, which values xAI at $113 billion, the documents show.
The tender offer is separate from other talks held by xAI, in which investors have discussed putting as much as $20 billion into the company at a valuation of up to $120 billion.
Earlier this year, Mr. Musk said he was merging xAI with X, formerly known as Twitter, which he bought in late 2022 for $44 billion. A generative A.I. company, xAI developed the chatbot Grok, which competes with OpenAI’s ChatGPT.
Many investors in the tender offer have previously invested in Mr. Musk’s companies, including the electric vehicle manufacturer Tesla and the rocket company SpaceX.
Fidelity previously invested in Mr. Musk’s deal to buy Twitter. It had marked down its valuation of the social media company to less than $10 billion last year, according to public documents.
Human Capital, a small Bay Area venture firm, is also investing. Its co-founder Baris Akis became heavily involved with the presidential transition after Mr. Musk stumped for President Trump and became a close adviser.
A spokesman for xAI did not respond to a request for comment. Representatives for Fidelity, TPG, ARK Invest, Sequoia Capital and Human Capital did not respond to requests for comment.
Ryan Mac covers corporate accountability across the global technology industry.
Kate Conger is a technology reporter based in San Francisco. She can be reached at [email protected].
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