Elon Musk's xAI has secured $6 billion in its latest funding round, bringing its total capital to $12 billion and valuing the company at $50 billion. The round was backed by 97 investors, including major players like Nvidia and AMD.
Key Investors and Funding Goals
Key investors in this funding round include:
- Nvidia
- AMD
- Andreessen Horowitz
- Blackrock
- Fidelity
- Kingdom Holdings
- Sequoia Capital
The company plans to raise more funds next year to challenge established leaders in the generative AI market.
Supercomputer Ambitions
xAI is building the Colossus supercomputer, which currently utilizes 100,000 Nvidia H100 GPUs and is expected to expand to 200,000 GPUs soon. Musk aims to ultimately build a supercomputer powered by one million GPUs.
The $6 billion raised could potentially purchase a supercomputer with 100,000 Nvidia GPUs, as GPUs typically make up roughly half the cost of a supercomputer cluster. These powerful machines will be used to train more sophisticated AI models, aiming to compete with OpenAI's ChatGPT and Google's Gemini.
xAI vs. Competitors
Musk has positioned xAI as a direct competitor to OpenAI, accusing them and Microsoft of anti-competitive practices. He also claims xAI benefits from user data generated on X (formerly Twitter) and other Musk enterprises like Tesla and SpaceX.
xAI's Grok Model
xAI has developed its own AI model called Grok, which powers several tools on X:
- A chatbot for X Premium users
- An image generator called Flux
- Customer service for SpaceX's Starlink
Grok is known for being more willing to answer provocative questions than some other AI models.
Financial Performance and Future Goals
While xAI currently generates approximately $100 million annually, the company aims to compete with competitors like Anthropic and OpenAI, which are targeting billions in revenue. With the $31 billion in AI venture capital activity in Q3 2024, xAI is poised to capture a larger share of the market.
