Elon Musk's AI venture, xAI, has successfully secured $6 billion in a Series B funding round. The investment, which values the company at $18 billion pre-money, was led by prominent investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding.
Origins and Leadership
xAI, spun out of the social network X, was launched by Musk in July 2023. Musk, who also leads Tesla, SpaceX, and X (formerly Twitter), co-founded OpenAI but departed in 2018. Following his departure, Musk has been a vocal critic of OpenAI, culminating in legal action against the organization in March for allegedly violating its non-profit commitments.
In November 2023, xAI introduced its first AI chatbot, Grok, initially to a select group of users. Grok was later made available to X users subscribing to the Premium+ plan at $16 per month. By April, the company had released Grok-1.5V, an updated version featuring vision capabilities alongside text prompt support. Earlier this year, xAI also open-sourced the Grok model, though it did not include any training code.
Future Plans and Technological Advancements
The newly acquired funds are earmarked for several key initiatives, including the development of advanced infrastructure and the acceleration of research and development for future technologies. xAI has hinted at “multiple exciting technology updates and products” to be unveiled soon. An unconfirmed report suggests that xAI is working on the next iteration of Grok and a new supercomputer, expected to be operational by the end of 2025. This supercomputer will reportedly utilize clusters of Nvidia H100 GPUs, quadrupling the size of existing AI GPU clusters.
xAI has expressed a commitment to developing “truthful” AI systems. However, the company has faced challenges, such as Grok's news summary feature on X, which has been reported to hallucinate and generate misleading information. Despite these issues, xAI aims to expand Grok's reach beyond X through potential partnerships.
The substantial funding and ambitious plans underscore xAI's commitment to pushing the boundaries of AI technology and infrastructure. With a valuation of $18 billion pre-money, xAI is well-positioned to make significant strides in the AI sector.
