Elon Musk's xAI Secures $6 Billion in Funding, Accelerating AI Race

Elon Musk's xAI raises $6B in equity financing as AI race heats up

Elon Musk's artificial intelligence startup xAI has raised another $6 billion from investors as it ramps up competition with Sam Altman-led OpenAI, according to a regulatory filing. XAI - which created that snarky "Grok" chatbot available on Musk's social media site X - raised the funds from a total of 97 investors, the SEC filing revealed on Thursday. The minimum investment in exchange for equity was $77,593. The filing did not disclose any individual investor names or reveal the size of other investments that occurred as part of the round. Last month, CNBC reported that the round included $5 billion from sovereign funds in the Middle East and $1 billion from other investors - and boost xAI's valuation to $50 billion. The money is expected to help Musk's AI startup build up its access to computing power. XAI is expanding its supercomputer facility in Memphis, Tennessee to host at least one million graphics processing units (GPUs), local officials announced earlier this week. The GPUs are needed to train xAI's models. Even with its latest fundraise, xAI is still far smaller than OpenAI, which developed a commanding lead in the AI race with its release of ChatGPT. In October, OpenAI closed a $6.6 billion fundraising round that valued the company at $157 billion. Altman is also leading an effort to restructure OpenAI as a for-profit company - while relegating the non-profit entity that has governed the firm since it was founded in 2015 to less prominent role. As The Post reported earlier this week, Musk - who cofounded OpenAI but later had a falling-out with Altman - filed a request for an injunction to block the firm from becoming a for-profit. Musk, who filed a major lawsuit against Altman and OpenAI earlier this year, argued the firm has ran afoul of antitrust law through its collaboration with Microsoft, which has poured billions into its operations as a key investor. "Plaintiffs and the public need a pause," Musk's filing for the injunction said. "OpenAI's path from a non-profit to a for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission and rampant self-dealing." "It cannot lumber about the marketplace as a Frankenstein, stitched together from whichever corporate forms serve the pecuniary interests of Microsoft and Altman at any given moment," the filing added.

xAI Secures USD 6 Billion in New Funding to Enhance AI Capabilities

Grok-2, the latest language model, introduces advanced reasoning capabilities. xAI, Elon Musk's artificial intelligence (AI) company, has raised USD 6 billion in new capital, according to a regulatory filing. The equity financing came from 97 investors and includes stakes as small as USD 77,593, as stated in the filing with the US Securities and Exchange Commission on Thursday. The filing did not disclose the identities of the investors. Furthermore, the company has not provided specific information regarding its valuation or revenue figures. Also Read: OpenAI Raises USD 6.6 Billion to Accelerate AI Research and Expansion The funding comes as xAI seeks to bolster its presence in the AI industry by expanding its Memphis, Tennessee, supercomputer to accommodate at least one million graphics processing units (GPUs). Earlier reports indicate that existing investors, including Valor Equity Partners, Sequoia Capital, Andreessen Horowitz, and the Qatar Investment Authority, participated in the funding round. Since its inception last year, xAI has launched its generative AI model, Grok, which powers features on X. The company reportedly plans to use funds from this round to purchase 100,000 AI chips from Nvidia. This new funding brings xAI's total capital raised to USD 12 billion, adding to the USD 6 billion tranche secured earlier in May. The company stated that the Series B funding will be used to bring its first products to market, build advanced infrastructure, and accelerate research and development of future technologies. "Our Series B funding round of USD 6 billion with participation from key investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management and Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others," the company announced in May. "xAI is primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity. The company's mission is to understand the true nature of the universe," the company said in a blog post. Also Read: Telefonica's Wayra Invests in AI Startup Perplexity, Signs Commercial Agreement xAI's flagship product, a chatbot called Grok, is available to paying users of X, the social network formerly known as Twitter. In August, the company released Grok-2, a frontier language model with state-of-the-art reasoning capabilities. This release introduced two models: Grok-2 and Grok-2 Mini. In November, xAI launched the API Public Beta, offering programmatic access for developers to build applications using Grok foundation models via the newly released API.

xAI hits $12B in capital -- The billionaire's AI empire grows

Elon Musk's xAI has secured $6 billion in new funding from various investors, lifting its total capital raised to $12 billion and reportedly valuing the company at over $40 billion. A regulatory filing with the U.S. Securities and Exchange Commission confirmed this latest financial round, which saw participation from 97 investors, each contributing a minimum of $77,593. The recent funding follows a $6 billion previous round closed in May, marking a significant uptick in investment interest in Musk's AI venture. The latest capital inflow aims to support xAI's ambitious plans, which include enhancing technological capacities and scaling its primary generative AI model, Grok. Prominent investors from previous rounds, such as Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz, were also involved in this funding phase, along with the Qatar Investment Authority. Since its inception in 2023, xAI has aggressively pursued growth, primarily focusing on the development of Grok, a chatbot that enhances user interaction on X, formerly known as Twitter. The model is designed to provide a more candid and less restrained conversational experience, often referred to by Musk as "maximally truth-seeking." Despite Grok's self-described rebelliousness, there are indications of political biases influencing its responses, a point Musk has publicly disputed. Grok is integrated into many features on X, allowing it to generate images and potentially perform various functions in the future, from search capabilities to content analysis. The chatbot has gained traction among users, particularly those subscribed to X Premium, marking a significant evolution in Musk's digital ecosystem strategy. As part of a comprehensive strategy, xAI plans to utilize data from Musk's various enterprises, including Tesla and SpaceX, to enhance its models. The company is already operational in supporting customer service for SpaceX's Starlink internet service. Furthermore, xAI's collaboration with Tesla is reportedly under discussion, aiming to apply its AI technology to enhance Tesla's research and development efforts. xAI has ambitious infrastructure goals, recently constructing a supercomputer facility in Memphis, optimized for training its AI models. This facility, celebrated as one of the largest investments in Memphis's history, currently supports 100,000 Nvidia GPUs and seeks to expand its power supply significantly. Plans to upgrade are anchored in securing additional energy resources from local authorities, aiming to improve the overall technological buildout. The growth of xAI has been marked by swift personnel expansions, increasing from just a dozen employees in March 2023 to over 100 today. This rapid development trajectory aligns with Musk's vision of creating an AI ecosystem built on data exchanges across his various enterprises, proposing a comprehensive integration of AI capabilities. Musk's assertions suggest xAI could benefit substantially from the vast data generated on X, leveraging user interactions to refine its AI capabilities further. Recent changes to X's privacy policy would allow third parties, including xAI, to utilize user posts for training its models, notwithstanding concerns about data privacy from users and stakeholders. The AI venture capital landscape is witnessing a turbulent surge, with xAI's latest funding positioned within a broader trend where major AI startups secure massive financing rounds. For instance, Anthropic recently raised $4 billion from Amazon, bringing its total to $13.7 billion, while OpenAI announced a $6.6 billion round, raising its total to $17.9 billion. Tesla's stock gest a 7% boost as Trump turns up the heat on self-driving xAI's revenue has reportedly reached approximately $100 million per year. In contrast, industry competitors are targeting substantially higher revenue streams, with Anthropic expected to generate $1 billion this year and OpenAI aiming for $4 billion by the end of 2024. These comparisons echo the dynamic and competitive nature of the AI sector, where funding is expected to continue to flow as companies scale operations and expand their research capabilities. Musk has indicated that xAI plans to continue expanding its investor relationships, anticipating further funding rounds next year. Nonetheless, this approach raises tensions, particularly regarding Musk's dual role with Tesla and xAI. Tesla shareholders have expressed concerns over the potential diversion of resources and talent, leading to ongoing tensions that underline the challenges of navigating multiple high-stakes ventures concurrently.

Elon Musk's xAI raises $6B to scale GPU infrastructure - SiliconANGLE

Elon Musk's artificial intelligence startup xAI Corp. announced today that it had raised $6 billion in new equity financing as the company seeks to further expand its supercomputer facility to house at least one million graphics processing units. Reports that xAI was seeking to raise additional funding first emerged in October, with reports suggesting that the company was seeking to raise "several billion dollars" on a $40 billion valuation. The company had previously raised $6 billion on a $24 billion valuation in May. Another report on Nov. 15 pegged the amount xAI was seeking to raise at $6 billion - the final figure - at a valuation of $50 billion. The same reports suggest that the bulk of the capital - $5 billion - would come from sovereign funds in the Middle East, with there rest coming from other investors. Other reports at the time suggested that the valuation of the deal would be $45 billion. Exactly what the final valuation of the deal was is not clear at the time of writing. Launched by Musk in 2023, xAI is aiming to develop an advanced artificial general intelligence system that surpasses current AI capabilities. The company says it's focused on building a safe, robust AGI that is driven by Musk's vision of creating beneficial and human-aligned intelligence. It released its first large language model, Grok-1, late in 2023 before releasing Grok-1.5 in April and Grok-2 in August. The latest Grok-2 model can generate text, troubleshoot code, perform related tasks and analyze user-provided images. Core to the company's vision is building computing processing power. In September, xAI announced that it had completed the assembly of an artificial intelligence training system that features 100,000 graphics cards. Called "Colossus," the system is claimed by Musk to be the "most powerful AI training system in the world" and runs on 100,000 Nvidia Corp. H100 graphics cards. While a layperson or informed observer might think that 100,000 H100 GPUs would be ample, Musk has other ideas, having first announced plans in September to expand Colossus with 100,000 more chips, of which half are expected to be H200s, a more advanced GPU than the H100 GPUs currently used by Colossus. Forward to only yesterday and it was reported that xAI is now aiming to expand Colossus, which is located in Memphis, Tennesse, to at least one million GPUs. Exactly how xAI intends to get to one million is not clear. Nvidia H100s retail for around $25,000 each, and H200s are more expensive again - while xAI would likely get a decent bulk discount, 800,000 H100s or 200s at $25,000 a pop is $20 billion, more than xAI has raised in funding. The new funding raised by xAI comes after industry leader OpenAI raised $6.6 billion on a $157 billion valuation on Oct. 2, while another large player in the space - Anthropic PBC - was reportedly in talks to raise new funding on a $40 billion valuation in September.

Musk's xAI raises around $6 bln in equity financing

Dec 5 (Reuters) - Elon Musk's artificial intelligence startup xAI said on Thursday it has raised around $6 billion in equity financing as it races to compete with other AI firms. The funding comes at a time xAI is looking to increase its footprint in the artificial intelligence industry by expanding its Memphis, Tennessee, supercomputer to house at least one million graphics processing units. Musk, who launched xAI last year, expanded his lawsuit against ChatGPT maker OpenAI last month saying OpenAI illegally sought to monopolize the market for generative artificial intelligence and sideline competitors. CNBC reported last month that xAI was raising $6 billion with a post-raise valuation seen at more than $50 billion. In October, OpenAI closed a $6.6 billion funding round which valued it at $157 billion. Reporting by Zaheer Kachwala in Bengaluru; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial IntelligenceArtificial Intelligence

Musk's xAI secures $6 billion in latest funding round By Investing.com

Elon Musk's artificial intelligence venture, xAI, has successfully secured $6 billion in a new round of funding, as revealed by a recent regulatory filing with the US Securities and Exchange Commission. The completion of this round comes after months of anticipation and negotiations. The funding attracted a broad base of support, with 97 investors contributing to the round. Investment amounts varied, with the smallest recorded stake being $77,593. The details of the filing, which took place on Thursday, did not disclose the identities of the investors. Furthermore, it did not provide specific information regarding the company's valuation or revenue figures. Back in October, reports from Bloomberg News indicated that xAI was in the process of seeking fresh capital, aiming for a valuation of $40 billion, a figure that did not account for the funds being raised at that time. This latest financial injection follows a previous $6 billion funding round that xAI completed in May, which at the time placed the company's valuation at $24 billion, inclusive of the capital raised. The current status of xAI's valuation post this most recent funding round remains unspecified in the filing.

Musk's xAI Wraps Up $6 Billion in Funding in Latest Round

Elon Musk's xAI has raised $6 billion in new capital, according to a regulatory filing, wrapping up a funding round that has been in the works for months and was said to value the artificial intelligence startup at more than $40 billion. The equity financing came from 97 investors, and includes stakes as small as $77,593, according to the filing with the US Securities and Exchange Commission on Thursday. The company didn't list the names of investors, nor did it include a valuation or revenue. Bloomberg News reported in October that xAI was seeking new funding at a $40 billion valuation, not including dollars raised.

Elon Musk's xAI Raises $6B For The 2nd Time This Year As It Looks To Take The Challenge To OpenAI, Google And Jeff Bezos-Backed Anthropic - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Elon Musk-led artificial intelligence (AI) startup xAI disclosed on Thursday that it has raised $6 billion, with nearly 97 investors participating in the fundraising round. What Happened: xAI's latest fundraise comes at a time when the AI startup is looking to expand the footprint of its Colossus supercomputer tenfold - from its existing cluster of 100,000 Nvidia graphics processing units, or GPUs, xAI intends to increase it to more than a million. In its filing with the U.S. Securities and Exchange Commission (SEC,) xAI disclosed that investors bought equity for a minimum of $77,593. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. It's not clear what the AI startup is valued at after this round of funding, but previous reports suggested that the Musk-led company was aiming to double its valuation from $24 billion. This move is aimed at closing the gap with competitors such as Alphabet Inc. GOOG GOOGL subsidiary Google, OpenAI, and Jeff Bezos-backed Anthropic. Reports suggest that xAI has already commenced the expansion of its Colossus supercomputer in its Memphis facility. See Also: Jeff Bezos' Amazon Unveils Powerful AI Chip Clusters To Supercharge Anthropic's Models, Challenging Nvidia And OpenAI's Dominance Why It Matters: xAI has raised $12 billion so far this year - the first instance was in May and the funding round included prominent investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding. While xAI has not disclosed the list of investors in the new funding round, some of the prominent investors from the previous round were expected to participate, according to a report by the Wall Street Journal. The relationship between xAI and Tesla Inc. TSLA is also important. According to a Morgan Stanley analyst, the AI capabilities developed by xAI are crucial for Tesla's future in robotics, autonomy, and manufacturing. Musk has continued to remain vocal in his criticism of rival OpenAI, led by Sam Altman. He filed for an injunction on Dec. 1 to prevent OpenAI from transitioning to a for-profit entity. xAI's fundraising comes two months after Microsoft Corp.-backed MSFT OpenAI raised $6.6 billion at a valuation of $157 billion. While xAI is a private company, investors can now use Cathie Wood's ARK Venture Fund ARKVX to benefit from the growth of Musk-led AI company. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Misinformation Expert Admits Using ChatGPT To File Affidavit On Misinformation, Says OpenAI's Chatbot Added The Fake Details Photo courtesy: Shutterstock GOOGAlphabet Inc$173.88-0.25%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewGOOGLAlphabet Inc$172.33-0.18%MSFTMicrosoft Corp$442.31-0.07%TSLATesla Inc$369.30-0.05%Market News and Data brought to you by Benzinga APIs

Elon Musk's xAI lands billions in new cash to fuel AI ambitions

xAI, Elon Musk's AI company, has raised $6 billion, according to a filing with the U.S. Securities and Exchange Commission on Thursday. The Wall Street Journal previously reported that Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz were expected to contribute to the round, along with Qatar Investment Authority, Qatar's sovereign-wealth fund. The new cash brings xAI's total raised to $12 billion, adding to the $6 billion tranche xAI raised this spring. CNBC reported in November that xAI was aiming for a $50 billion valuation -- double its valuation as of six months ago. According to the Financial Times, only investors who'd backed xAI in its previous fundraising round were permitted to participate in this one. Reportedly, investors who helped to finance Musk's Twitter acquisition were given access to up to 25% of xAI's shares. Grok has what Musk has described as "a rebellious streak" -- a willingness to answer "spicy questions that are rejected by most other AI systems." Told to be vulgar, for example, Grok will happily oblige, spewing profanities and colorful language you won't hear from ChatGPT. Musk has derided ChatGPT and other AI systems for being too "woke" and "politically correct," despite Grok's own unwillingness to cross certain boundaries and hedge on political subjects. He's also referred to Grok as "maximally truth-seeking" and less biased than competing models, although there's evidence to suggest that Grok leans to the left. Over the past year, Grok has become increasingly ingrained in X, the social network formerly known as Twitter. At launch, Grok was only available to X users -- and developers skilled enough to get the "open source" edition up and running. Thanks to an integration with the open image generator Flux, Grok can generate images on X (without guardrails, controversially). The model can analyze images as well, and summarize news and trending events (imperfectly, mind). Reports indicate that Grok may handle even more X functions in the future, from enhancing X's search capabilities and account bios to helping with post analytics and reply settings. xAI is sprinting to catch up to formidable competitors like OpenAI and Anthropic in the generative AI race. The company launched an API in October, allowing customers to build Grok into third-party apps, platforms, and services. According to The Wall Street Journal, xAI is preparing to release a standalone consumer app similar to OpenAI's in December. Musk asserts that it hasn't been a fair fight. In a lawsuit filed against OpenAI and Microsoft, OpenAI's close collaborator, attorneys for Musk accuse OpenAI of "actively trying to eliminate competitors" like xAI by "extracting promises from investors not to fund them." OpenAI, Musk's counsel says, also unfairly benefits from Microsoft's infrastructure and expertise in what the attorneys describe as a "de facto merger." Yet Musk often says that X's data gives xAI a leg up compared to rivals. Last month, X changed its privacy policy to allow third parties, including xAI, to train models on X posts. Musk, it's worth noting, was one of the original founders of OpenAI, and left the company in 2018 after disagreements over its direction. He's argued in previous suits that OpenAI profited from his early involvement yet reneged on its nonprofit pledge to make the fruits of its AI research available to all. An xAI ecosystem xAI has outlined a vision according to which its models would be trained on data from Musk's various companies, including Tesla and SpaceX, and its models could then improve technology across those companies. It is already powering customer support features for SpaceX's Starlink internet service, according to The Wall Street Journal, and the startup is said to be in talks with Tesla to provide R&D in exchange for some of the carmaker's revenue. Tesla shareholders, for one, object to these plans. Several have sued Musk over his decision to start xAI, arguing that Musk has diverted both talent and resources from Tesla to what's essentially a competing venture. Nevertheless, the deals -- and xAI's developer and consumer-facing products -- have driven xAI's revenue to around $100 million a year. For comparison, Anthropic is reportedly on pace to generate $1 billion in revenue this year, and OpenAI is targeting $4 billion by the end of 2024. Musk said this summer that xAI is training the next generation of Grok models at its Memphis data center, which was apparently built in just 122 days and is currently powered partly by portable diesel generators. The company hopes to upgrade the server farm, which contains 100,000 Nvidia GPUs, next year. (Because of their ability to perform many calculations in parallel, GPUs are the favored chips for training and running models.) In November, xAI won approval from the regional power authority in Memphis for 150MW of additional power -- enough to power roughly 100,000 homes. To win the agency over, xAI pledged to improve the quality of the city's drinking water and provide the Memphis grid with discounted Tesla-manufactured batteries. But some residents criticized the move, arguing it would strain the grid and worsen the area's air quality. Tesla is also expected to use the upgraded data center to improve its autonomous driving technologies. xAI has expanded quite rapidly from an operations standpoint in the year since its founding, growing from just a dozen employees in March 2023 to over 100 today. In October, the startup moved into OpenAI's old corporate offices in San Francisco's Mission neighborhood. xAI has reportedly told investors it plans to raise more money next year. It won't be the only AI lab raising immense cash. Anthropic recently secured $4 billion from Amazon, bringing its total raised to $13.7 billion, while OpenAI raised $6.6 billion in October to grow its warchest to $17.9 billion Megadeals like OpenAI's and Anthropic's drove AI venture capital activity to $31.1 billion across over 2,000 deals in Q3 2024, per Pitchbook data.