Elon Musk’s xAI gets $6 bn funding boost

Tesla CEO Elon Musk’s AI startup, xAI, announced that it has secured $6 billion in Series B funding.

xAI plans to utilise this capital to launch its inaugural products, enhance infrastructure, and expedite the research and development of future technologies. The company hinted at upcoming technology updates and product releases. Musk hinted at further announcements in a post on X, his social media platform.

“Join xAI if you believe in our mission of understanding the universe, which requires maximally rigorous pursuit of the truth, without regard to popularity or political correctness,” Musk shares via X.

The investment round featured investors such as Andreessen Horowitz and Sequoia Capital, along with Valor Equity Partners.

“Our Series B funding round of $6 billion with participation from key investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others,” xAI says in a release.

This substantial fundraising, which comes less than a year after xAI’s inception, represents a major investment in the burgeoning field of AI development. xAI, initially tied to Musk’s social media platform X (formerly Twitter), contributed to building the Grok AI service. The startup released Grok-1 in November 2023, followed by Grok-1.5 in March 2024, which featured extended context capabilities, and Grok-1.5V with image understanding capabilities. Additionally, xAI has introduced an open-source version of Grok-1, fostering advancements and extensions in the model.

“xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced. The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies,” the company states.

xAI is dedicated to developing sophisticated AI systems that are reliable, competent, and offer the maximum benefit to humanity. The company's mission is to uncover the fundamental truths of the universe, it adds.

Musk, an early proponent of AI, initially supported OpenAI before ChatGPT's debut in late 2022 but later distanced himself from the project, advocating for cautious development due to AI's potential risks.

Recently, Musk announced that his xAI has ambitious plans to build a supercomputer to upgrade its AI chatbot, Grok. Musk envisions this powerful machine being operational by fall 2025 and is considering a partnership with Oracle to achieve this goal. He has detailed plans for a "gigafactory of compute" to bolster xAI's goals. This supercomputer, incorporating 100,000 Nvidia chips, is slated to be operational by fall 2025. Musk has reassured investors of his dedication to achieving this timeline.