Elon Musk‘s AI venture, xAI, has raised $6 billion to fuel its ambitious plans to compete with ChatGPT and other AI technologies. The funding, which values xAI at $18 billion, is aimed at bringing the startup’s first products to market, developing advanced infrastructure, and accelerating research and development. Founded last summer, xAI has already launched Grok, which is available exclusively to X Premium subscribers on X (formerly known as Twitter).
This latest funding round attracted significant investors, including Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal.
Building the hardware necessary for advanced AI development is a costly endeavor. Nvidia’s upcoming Blackwell B200 AI graphics cards are priced between $30,000 and $40,000 each. Reports indicate that xAI will require 100,000 of Nvidia’s current H100 chips to power a supercomputer for an upgraded version of its Grok AI chatbot. Musk has told investors that the new data center is expected to launch by the fall of 2025.
The competitive AI landscape demands significant investment, with major tech firms like Google, Apple, Amazon, Microsoft, and Meta investing billions in their AI projects. Microsoft, for instance, has formed a multi-billion dollar partnership with OpenAI, whose CEO Sam Altman is reportedly seeking trillions more to overhaul the global chip industry. Musk, a founding member of OpenAI, is currently suing the company, claiming it has strayed from its original mission to benefit humanity.
Beyond xAI and OpenAI, Musk has expressed a preference for developing AI and robotics products outside of Tesla unless he gains more control. Meanwhile, Tesla shareholders are set to vote this week on whether to restore Musk’s $56 billion pay package ahead of the company’s annual meeting on June 13th.
