Billionaire tech mogul Elon Musk’s artificial intelligence startup, xAI, has raised $6 billion in its latest funding round, securing investments from US venture capitalists, chipmakers NVIDIA and AMD, as well as investment funds from Saudi Arabia and Qatar. The funding comes as xAI seeks to establish itself in the competitive AI market dominated by players like OpenAI.
xAI, which launched in July 2023, is behind the Grok chatbot and is now valued at an estimated $50 billion, making it one of the most valuable startups globally. However, it remains far behind OpenAI, which has an estimated valuation of $157 billion.
Announcing the funding on Monday, xAI stated that the money would be used to “ship groundbreaking products that will be used by billions of people” and to “accelerate the research and development of future technologies enabling the company’s mission to understand the true nature of the universe.”
Musk, who also leads SpaceX and Tesla, emphasized the need for significant computational power to drive AI innovations. Writing on his X account, he noted, “A lot of compute is needed” to support AI products.
Despite the company’s ambitious goals, critics have highlighted the ongoing challenges in the AI sector, including substantial cash burn and unclear paths to profitability. Musk’s push for AI dominance comes despite his previous warnings about the risks AI poses to human civilization.
In May, xAI raised an earlier $6 billion, and Musk has been vocal about his intent to secure a larger share of AI investment. His efforts come amid a legal battle with OpenAI, which he co-founded in 2015 as a non-profit before leaving in 2018. Musk has accused OpenAI of violating legally binding commitments by transitioning into a for-profit entity.
Musk’s ventures into AI come shortly after he signed an open letter calling for a pause in the development of advanced AI models, underscoring his complex and sometimes contradictory approach to the technology.