Elon Musk’s xAI secures $6 billion in funding

Elon Musk‘s artificial intelligence startup, xAI, announced it has raised $6 billion in funding. The capital will help launch the company’s first products, build advanced infrastructure, and accelerate research and development of future technologies.

Founded last summer, xAI has already introduced Grok, a version of OpenAI’s ChatGPT, available to X Premium subscribers on X, formerly known as Twitter.

The latest funding round saw investments from Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal.

A Securities and Exchange Commission filing last year indicated xAI’s intention to raise up to $1 billion in equity investments. Despite Musk’s initial denial, The Financial Times reported the company was seeking up to $6 billion, which has now been achieved.

The high costs of AI development hardware, such as Nvidia’s upcoming Blackwell B200 AI graphics cards priced between $30,000 and $40,000, highlight the significance of this funding. Reports indicate xAI needs 100,000 Nvidia H100 chips for a supercomputer to power an upgraded Grok AI, with plans to launch a new data center by fall 2025.

Competition in the AI sector is intense, with major tech firms like Google, Apple, Amazon, Microsoft, and Meta heavily investing in AI projects. Microsoft has formed a multi-billion-dollar partnership with OpenAI, whose CEO Sam Altman is pursuing additional funding to revamp the global chip industry. Musk, a co-founder of OpenAI, is suing the company, claiming it has deviated from its original mission to benefit humanity.

Musk has indicated a preference for developing AI and robotics products outside Tesla unless he gains more control. Tesla shareholders will vote this week on reinstating Musk’s $56 billion pay package ahead of the annual meeting on June 13.