Elon Musk’s xAI Secures $6 Billion in New Funding
Elon Musk’s artificial intelligence company, xAI, announced on Monday that it has raised $6 billion, providing a significant boost as it competes with rivals like OpenAI.
According to the company’s website, the funds will be used to enhance its infrastructure and expedite research and development efforts. The funding round saw participation from BlackRock, Fidelity, Sequoia Capital, and other major investors.
“We need a significant amount of compute,” Musk commented on the investment round in a post on X.
According to a previous report by The New York Times, the latest fundraising could value xAI between $35 billion and $40 billion, up from $24 billion earlier this year. Neither Musk nor xAI has responded to requests for comment.
Musk is attempting to catch up in the AI race. The billionaire, who also heads companies like Tesla, X, and SpaceX, launched xAI last year—well after the AI industry’s surge, which produced numerous tools capable of generating text, images, and videos.
Musk quickly constructed what he claims will be the world’s largest supercomputer in Memphis, which powers Grok, xAI’s chatbot. Grok is available to subscribers on X.
Although Musk was a co-founder of OpenAI, he left the organization in 2018 after disagreements with other co-founders, including CEO Sam Altman.
Musk has since filed a lawsuit against OpenAI to prevent it from transitioning from a nonprofit to a for-profit entity, arguing that Altman and co-founder Greg Brockman violated the company’s founding agreement by prioritizing commercial interests over the public good. OpenAI contends that the lawsuit is an attempt to hinder the company while Musk develops a competitor.
(The New York Times has also sued OpenAI and Microsoft for copyright infringement related to news content used by AI systems. OpenAI and Microsoft have denied the allegations.)
Musk has argued that AI poses a threat to humanity, but he believes he has the capability to develop it more safely.
To kickstart xAI, Musk has trained its AI using data from X. Several investors who supported Musk’s acquisition of X in 2022 have also funded the AI startup, including the venture capital firm Andreessen Horowitz and Saudi Arabian Prince Alwaleed Bin Talal’s investment firm, Kingdom Holding. X has raised over $12 billion in total.
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