- Investments from NVIDIA, AMD, and Gulf funds boost xAI’s valuation to $50 billion
- Tech mogul doubles down on AI innovation despite previous warnings on its risks
Elon Musk’s artificial intelligence startup, xAI, has raised $6 billion in a new funding round, attracting investments from US venture capitalists, chipmakers NVIDIA and AMD, and sovereign wealth funds from Saudi Arabia and Qatar. The injection of capital propels xAI’s valuation to an estimated $50 billion, cementing its status as one of the world’s most valuable startups.
The funding announcement on Monday marks a significant step in xAI’s bid to compete with industry leaders like OpenAI, valued at $157 billion. Musk, known for his leadership roles at SpaceX and Tesla, said the funds would be used to accelerate product development and drive research into technologies aligned with xAI’s mission to “understand the true nature of the universe.”
In a post on his X platform, Musk highlighted the computational demands of advancing AI products, stating, “A lot of compute is needed.” xAI’s flagship product, the Grok chatbot, has already made waves in the competitive AI market since the company’s launch in July 2023.
Despite its rapid rise, xAI faces challenges typical of the AI sector, including significant cash burn and uncertain profitability. Critics have questioned Musk’s dual approach to AI, noting his earlier warnings about the technology’s potential risks to humanity.
This funding follows a previous $6 billion raised in May, reflecting Musk’s determination to capture a larger share of the AI market. His efforts come amid a legal dispute with OpenAI, a company he co-founded in 2015 before departing in 2018. Musk has accused OpenAI of violating agreements by transitioning from a non-profit to a for-profit entity.
Musk’s growing presence in the AI space is underscored by his complex stance on the technology. In March, he signed an open letter calling for a pause in the development of advanced AI models, even as he pushes forward with xAI’s ambitious expansion plans.
