Elon Musk's xAI filed for a private sale of $1 billion worth of unregistered securities

The form allows Elon Musk to legally sell assets without going through a registration process.

Elon Musk, who was also one of the founders of OpenAI at the time and has been working on xAI for a while now, has launched another chatbot called Grog, which has a selling point of being “quirky” and access to the Twitter API to stay up to date with the latest happens.

Grok is still in beta

Currently, access to the chatbot is severely restricted, and in fact only internal testers can use it.

However, a recent filing with the SEC shows that Elon Musk has secured some outside investment for his new product and is looking for more.

Earlier this year, Musk appeared in court over allegations of DOGE financial misconduct and insider trading, which he dismissed as flippant and completely untrue.

While it’s unclear whether the sale of xAI-related assets will be cryptocurrency-related, Musk’s filing is intended to avoid any future legal troubles, given the SEC’s picky behavior in recent months.

Private Buyers Looking for Large Investments

The SEC’s Form D allows entrepreneurs to sell securities without registration, with one condition: the sale must be private to prevent retail investors from buying securities and potentially incurring losses.

Yesterday, Elon Musk filed one of those forms informing the SEC that he intends to raise $1 billion through a private placement of xAI equity. These assets are labeled as related to “other technologies”, avoiding the “computer” and “telecommunications” categories.

The table also states that more than $134.6 million worth of equity was sold on Nov. 29. However, any further investment must be worth at least $2 million.

The private placement of xAI’s equity may be the last stop before the product goes public. Given that xAI was founded in July and its product has only been tested for about three months, the turnaround time is relatively short.

Still, considering Elon Musk’s resources that allow him to hire the best talent in the industry, as well as the AI experience he gained during his tenure on OpenAI’s board of directors before Altman took over, it’s safe to assume that Grok will be welcomed in addition to the ever-growing roster of AI chatbots.