xAI, founded by Elon Musk last summer, announced that it raised $6 billion in investment. Musk said this will help the startup “bring its first products to market, build advanced infrastructure, and accelerate research and development of future technologies.”
So far xAI has released Grok, a supposedly sharper version of OpenAI's ChatGPT, accessible via X and currently only available to X Premium subscribers.
According to information provided by xAI, the investment in this round came from various sources, including Andreessen Horowitz, Sequoia Capital and Saudi Arabian Prince Al Waleed bin Talal. Last year, a filing with the U.S. Securities and Exchange Commission showed xAI was looking to raise up to $1 billion in equity investments. A few months ago, in a report published by The Financial Times, it was stated that the company was seeking an investment of $6 billion, but this was denied by Musk.
xAI is a very costly investment
The hardware that can power artificial intelligence development is quite expensive. Nvidia's upcoming Blackwell B200 AI graphics cards are priced between $30,000 and $40,000 each. The Information reported last week that xAI would need 100,000 of Nvidia's existing H100 chips before a supercomputer could run an upgraded version of the Grok AI chatbot. Musk allegedly told investors that the plan is to launch the new data center in the fall of 2025.
Continuing the AI race for chips, talent and technology won't be cheap. Major technology companies have poured billions of dollars into AI startups like Anthropic, in addition to the resources Google, Apple, Amazon, Microsoft, and Meta have poured into AI projects.
Aside from xAI and OpenAI, Musk said that when it comes to artificial intelligence and robotics, he would “prefer to build products outside of Tesla” unless it has more control. Tesla shareholders will begin voting this week on whether to reinstate Musk's $56 billion pay package ahead of the annual meeting on June 13.