Summary:
- Elon Musk’s xAI raises $6 billion in Series C funding, reaching a $45 billion valuation with investments from major players like Andreessen Horowitz, BlackRock, and tech giants Nvidia and AMD.
- The company’s AI model Grok powers various features on X (formerly Twitter), with plans to expand through a new iOS app and third-party developer access via API.
- xAI’s Memphis data center hosts 100,000 Nvidia GPUs with plans to double capacity, securing 150MW additional power while promising local infrastructure improvements.
- The company grew from 12 to 100 employees in one year, currently generating $100 million annual revenue, with plans for integration across Musk’s companies including Tesla and SpaceX.
Elon Musk’s artificial intelligence venture xAI has secured $6 billion in Series C funding, propelling the company’s valuation to $45 billion. The funding round attracted major investors including Andreessen Horowitz, BlackRock, Fidelity, Sequoia Capital, and tech giants Nvidia and AMD.
Kingdom Holding Company (KHC), the Saudi conglomerate, contributed $400 million to the round, marking their second investment in xAI following an equal contribution in the previous funding series. The latest injection brings xAI’s total funding to $12 billion, doubling its previous valuation of $24 billion.
“xAI’s most powerful model yet is currently training and we are now focused on launching innovative new consumer and enterprise products,” the company stated, indicating plans to accelerate infrastructure development and research initiatives.
The AI startup, formed in 2023, has rapidly expanded its operations from twelve employees to over 100 staff members. xAI’s flagship product, Grok, currently powers various features on X (formerly Twitter), including a chatbot available to premium subscribers. The company recently launched a standalone Grok iOS app for testing and opened its API to third-party developers.
xAI’s Memphis data center, constructed in just 122 days, houses 100,000 Nvidia GPUs and recently secured approval for 150 megawatts of additional power. The company plans to double its GPU capacity and has committed to improving local infrastructure, including water quality and power grid enhancements using Tesla-manufactured batteries.
The investment landscape in AI continues to heat up, with competitors securing substantial funding. Anthropic recently raised $4 billion from Amazon, while OpenAI secured $6.6 billion in October. According to PitchBook data, AI venture capital activity reached $31.1 billion across over 2,000 deals in the third quarter of 2024.
xAI’s ambitious growth plans include potential collaboration with Musk’s other ventures. The company is reportedly discussing R&D partnerships with Tesla and already provides customer support features for SpaceX’s Starlink service. However, these arrangements have drawn scrutiny from Tesla shareholders, who have filed lawsuits concerning potential conflicts of interest.
The company has indicated plans to raise additional funding in the coming year as it continues to compete with established AI leaders in the rapidly evolving artificial intelligence sector.
Source: Techcrunch
