• Elon Musk’s AI startup xAI announced raising $6 billion in funding to compete with OpenAI, Google, Microsoft, and others in the AI race.
• xAI has launched Grok, a version of ChatGPT available via Twitter (now X), and plans to use the funding to bring products to market, build infrastructure, and accelerate R&D.
• The funding came from sources like Andreessen Horowitz and Sequoia Capital, and xAI aims to build a supercomputer with 100,000 Nvidia chips to power an upgraded Grok.
Elon Musk founded the AI startup xAI last summer. Today, xAI announced raising $6 billion in a new round of funding. The money will help xAI bring its first products to market, build infrastructure, and accelerate R&D.
xAI Launches Grok Chatbot
So far, xAI has launched Grok. It’s an edgy version of ChatGPT, available only to premium subscribers on X, formerly Twitter.
Major Investors in xAI’s Latest Round
The $6 billion came from several big names, according to xAI. These include Andreessen Horowitz, Sequoia Capital, and Saudi Prince Al Waleed bin Talal. Last year, an SEC filing showed xAI wanted to raise up to $1 billion in equity. A few months ago, the Financial Times said xAI sought $6 billion, which Musk denied at the time.
Massive Computing Power Needed for AI
The hardware for AI is expensive. Nvidia’s new B200 graphics cards cost $30k-$40k each. A report said xAI needs 100,000 Nvidia chips for an upgraded Grok chatbot. Musk said the plan is to launch the data center powering this by fall 2025.
AI Race Heating Up Among Tech Giants
Competing in AI won’t be cheap. Big tech firms have invested billions in AI startups like Anthropic. Google, Apple, Amazon, Microsoft and Meta also pour resources into their own AI projects.
Microsoft Partnership and Lawsuit Against OpenAI
Microsoft has a multi-billion partnership with OpenAI. But Musk, an OpenAI founder, is suing the company for abandoning its mission. Meanwhile, OpenAI’s CEO wants trillions more to transform the chip industry.
Musk’s Control Over Tesla AI and Robotics
Outside of xAI and OpenAI, Musk said he prefers building AI/robotics products outside Tesla, unless he gets more control at Tesla. Tesla shareholders vote this week on restoring Musk’s $56 billion pay package.
