Visa Embedded Lending June 2024 Banner

Elon Musk’s Startup xAI Raises $6 Billion to Accelerate R&D

Elon Musk’s artificial intelligence (AI) startup xAI has raised $6 billion in a Series B funding round, giving it a pre-money valuation of $18 billion.

The company will use the new funding to take its first products to market, build advanced infrastructure and accelerate its research and development (R&D), xAI said in a Sunday (May 27) blog post.

XAI noted in the post that since Musk announced the formation of the company in July 2023, it has launched its AI chatbot Grok-1, the Grok-1.5 model with long context capability, the Grok-1.5V model with image understanding, and the open-source release of Grok-1.

“XAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced,” the company said in the post.

The company added that it is hiring for numerous roles and that xAI is focused on developing advanced AI systems that are “truthful, competent and maximally beneficial for all of humanity.”

XAI’s funding round including participation from Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Co. and Prince Alwaleed Bin Talal, per the post.

It was reported Thursday (May 23) that xAI had secured new backing, with Musk telling investors that the company can compete with market leaders like OpenAI, Anthropic and Google by tapping into data, technology and business of other companies he leads.

On Saturday (May 26), it was reported that the company’s investor presentation said xAI also aims to build its own supercomputer and launch the project as early as next year, to run the next iteration of Grok.

The device will connect Nvidia’s flagship H100 graphics processing units (GPUs) and will be at least four times the size of the biggest GPU clusters that exist today.

When Musk announced the launch of xAI in July 2023, the AI company become the sixth firm that he oversees, with the others being Tesla, SpaceX, X, Neuralink and The Boring Company.

Musk helped co-found OpenAI in 2015 but left the organization in 2018 and has been increasingly critical of that business since, particularly as it tied its fortunes to Microsoft.