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Elon Musk's xAI Valued at $24 Bln after Fresh Funding 

Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
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Elon Musk's xAI Valued at $24 Bln after Fresh Funding 

Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)
Elon Musk, chief executive officer of SpaceX and Tesla, speaks to the media during the launch of SpaceX's Starlink internet service in Indonesia at a sub district community health center in Denpasar, Bali, May 19, 2024. (Reuters)

Elon Musk's AI startup xAI raised $6 billion in series B funding, reaching a post-money valuation of $24 billion as investors bet big on challengers to companies like OpenAI in the intensifying AI race.

The funding round was backed by investors including Andreessen Horowitz and Sequoia Capital, the company said in a blog post on Sunday.

The company's pre-money valuation was $18 billion, Musk said in a post on X.

The money will be used to take xAI's first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said.

"There will be more to announce in the coming weeks," Musk said in another X post, in response to the announcement of the funding.

Companies like Microsoft backed OpenAI and Alphabet's are among those leading the fierce race for generative AI dominance, driving significant investments and innovation in the rapidly evolving landscape.

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Salesforce Gains as Software Firm Bets on AI Tools to Power Growth

The Salesforce logo is pictured on a building in San Francisco, California, US October 12, 2016. REUTERS/Lily Jamali/File Photo Purchase Licensing Rights
The Salesforce logo is pictured on a building in San Francisco, California, US October 12, 2016. REUTERS/Lily Jamali/File Photo Purchase Licensing Rights
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Salesforce Gains as Software Firm Bets on AI Tools to Power Growth

The Salesforce logo is pictured on a building in San Francisco, California, US October 12, 2016. REUTERS/Lily Jamali/File Photo Purchase Licensing Rights
The Salesforce logo is pictured on a building in San Francisco, California, US October 12, 2016. REUTERS/Lily Jamali/File Photo Purchase Licensing Rights

Shares of Salesforce gained more than 5% on Thursday as investors cheered the customer relationship management software maker's upbeat quarterly results and its artificial intelligence push to drive growth.

The company has been heavily investing to integrate its AI technologies into existing products, such as its messaging platform Slack, to enhance their capabilities and attract more customers.

"We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying GenAI agents," Reuters quoted Goldman Sachs analyst Kash Rangan as saying.

Wall Street was concerned that tempered cloud spending would affect Salesforce in a tough economy, but the software-as-a-service (SaaS) firm reported better-than-expected revenue, profit and margins in the second quarter.

Salesforce also raised its profit forecast for the year ending January 2025, as margins continue to expand, thanks to its restructuring efforts last year.

The stock is trading at 24.49 times that of Wall Street's profit expectations, compared with 52.11 for SaaS peer ServiceNow and cloud contact center firm Five9's 13.30.

Salesforce is set to add $14 billion to its market capitalization if premarket gains hold. The company's valuation stood at $248 billion as of Wednesday's close.

"We think these results alone are not good enough to drive a sustainable rally from here. For that, we need more catalysts, which could come with the new AI solutions," which are set to be showcased at its event Dreamforce and launched in October, Barclays analyst Raimo Lenschow said.

Some analysts believe that sustained growth in the coming quarters can come through customer support platform Agentforce, which is not yet commercially available.