Elon Musk's xAI Raises $6B, Valued at $24B

Elon Musk's AI startup, xAI, has successfully secured $6 billion in its Series B funding round, elevating its post-money valuation to approximately $24 billion. This significant investment underscores the growing interest in competitors to OpenAI amidst the rapidly intensifying AI landscape.

In a recent blog post, xAI announced that the funding round received substantial backing from notable investors, including Andreessen Horowitz (a16z) and Sequoia Capital.

Established in July 2023, xAI introduced its first product, the Grok chatbot, in November of the same year. More recently, xAI revealed the Grok-1.5 Vision multimodal model, which can process text, images, documents, and spreadsheets. The fresh influx of capital will enable xAI to acquire additional AI computing resources, enhancing its ability to compete with other industry leaders such as OpenAI and Anthropic.

According to xAI, the newly raised funds will be allocated to launching its initial products, constructing advanced infrastructure, and accelerating the research and development of future technologies. Musk highlighted that the next-generation Grok model is currently being trained on 20,000 Nvidia (NVDA-US) H100 GPUs, with expectations that the demand for AI GPUs will surge to 100,000 for the upcoming Grok 3 models.

"More announcements will be made in the coming weeks," Musk stated in an X post following the funding news.

Although xAI did not disclose its latest valuation, industry estimates place the company at around $24 billion post-Series B. This valuation emphasizes the fierce competition for resources in the AI field. Positioned as a formidable competitor to OpenAI, xAI is dedicated to advancing its AI models and vision throughout Silicon Valley.