Last summer, Elon Musk established xAI, which has now secured $6 billion in funding. The startup aims to use this investment to launch its initial products, develop advanced infrastructure, and speed up the research and development of future technologies.
xAI has introduced Grok, a more provocative alternative to OpenAI’s ChatGPT. Grok is available on X, the platform previously known as Twitter, but currently only to X Premium subscribers.
The recent funding round saw contributions from a variety of sources, including Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal. Previously, xAI’s filings with the Securities and Exchange Commission indicated plans to raise up to $1 billion in equity investments. A few months ago, The Financial Times reported that xAI was aiming for a $6 billion raise, a claim Musk denied at the time.
Developing AI technologies requires significant investment, particularly in hardware. Nvidia’s upcoming Blackwell B200 AI graphics cards are expected to cost between $30,000 and $40,000 each. According to a report from The Information last week, xAI would need 100,000 of Nvidia’s current H100 chips to build a supercomputer for an enhanced version of its Grok AI chatbot. Musk has informed investors that the goal is to launch this new data center by fall 2025.
The race for AI supremacy involves substantial spending on chips, talent, and technology. Major tech companies are heavily investing in AI startups like Anthropic, alongside their own AI projects. Google, Apple, Amazon, Microsoft, and Meta are all pouring resources into their AI endeavors.
Microsoft has also formed a multi-billion-dollar partnership with OpenAI. OpenAI’s CEO, Sam Altman, is reportedly seeking additional funding to overhaul the global chip industry. Although Musk co-founded OpenAI, he is currently suing the company, alleging it has strayed from its mission to benefit humanity.
In addition to his work with xAI and OpenAI, Musk has indicated a preference for developing AI and robotics products outside of Tesla, unless he gains more control over the projects. Tesla shareholders are set to vote this week on reinstating Musk’s $56 billion pay package, ahead of the company’s annual meeting on June 13th.
