Elon Musk’s artificial intelligence venture xAI is reportedly raising up to $6 billion in a new funding round that values the company at $50 billion, according to CNBC’s David Faber. The funding round is expected to close early next week.
According to sources familiar with the matter, the funding package consists of approximately $5 billion from Middle Eastern sovereign wealth funds, with an additional $1 billion coming from other investors, some of whom are existing stakeholders looking to increase their positions.
The company reportedly plans to use the substantial capital injection to acquire 100,000 Nvidia chips, positioning itself for significant computational capacity expansion. Sources also indicated that Tesla’s Full Self Driving technology is expected to utilize the new Memphis supercomputer.
About xAI
Founded in July 2023, xAI’s stated mission is to “understand the true nature of the universe.” The company made its first major product launch in November 2023 with Grok, a chatbot that draws inspiration from “The Hitchhiker’s Guide to the Galaxy.” At launch, xAI claimed that Grok had undergone two months of training and possessed real-time internet knowledge capabilities.
Competitive Landscape
With Grok, xAI has positioned itself to compete directly with several major players in the AI chatbot space, including:
- OpenAI, creator of ChatGPT (which Musk helped found before departing in 2018)
- Google’s Bard
- Anthropic’s Claude
The significant funding round, if completed, would mark a major development in the competitive AI landscape, providing xAI with substantial resources to advance its technological capabilities and market presence.
