Elon Musk’s xAI raises $6 billion in new money to fuel its AI ambitions

Updated Dec 25, 12:21 PM Pacific: Added xAI’s valuation details and Kingdom Holdings’ contribution.

xAI, Elon Musk’s artificial intelligence company raised $6 billion in Series C funding round.

Company announced this week Andreessen Horowitz, Blackrock, Fidelity, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, Vy Capital, Nvidia, AMD and others participated.

Kingdom Holdings, Saudi the conglomerate holding company invested about $400 million in the round. public presentation. The filing also revealed that xAI is now valued at $45 billion, doubling its previous valuation.

The new cash adds to xAI’s $6 billion tranche, bringing xAI’s total to $12 billion. raised in May.

according to According to the Financial Times, only investors who backed xAI in a previous fundraising round were allowed to participate in this round. According to the information, who are the investors? helped financing Musk’s purchase of Twitter entry Up to 25% of xAI’s shares.

“XAI’s strongest model yet…is currently in training and we are now focused on launching innovative new consumer and enterprise products,” xAI he said in the statement. “Funds from this funding round will be used to further accelerate our advanced infrastructure, ship groundbreaking products … and … accelerate research and development.”

Strengthening the AI

Musk created xAI last year. Soon the company was dissolved Grokan advanced generative AI model that enables a range of features, including chatbots, now available in X X Premium subscribers and free users in some regions.

Grok has what Musk described as a “rebellious streak” — willing to answer “spicy questions that other AI systems dismiss.” For example, Grok, who is said to be vulgar, will oblige with a sense of glee, uttering profanities and colorful language. ChatGPT.

There is musk he scoffed ChatGPT and other AI systems are too “woke” and “politically correct” despite Grok himself reluctance to cross certain boundaries and hedging on political issues. He also calls Grok a “maximum truth seeker” and less biased than competing models, although proof Suggesting that Grok lean to the left.

Over the past year, Grok has been increasingly tuned into X, the social network formerly known as Twitter. In the beginning it was Grok only It’s available to X users – and developers skilled enough to get it “open source” edition it works and works.

thanks to a integration With xAI’s built-in image generation model, AuroraThe Grok can create images on the X (controversially without the protective bars). The model can also analyze images and summarize news and trending events — flawlessmind.

Reports suggest that Grok may handle more X features in the future strengthening X’s search capabilities and account bios assisting with post analytics and response settings. X recently “Grok button” is designed to help users discover “relevant context” and dive deeper into trending discussions and real-time events.

xAI is sprinting to catch giant rivals like OpenAI and Anthropic in the generative AI race. Company has been activated In October, an API that allows customers to build Grok into third-party applications, platforms and services. And it just came out standalone Grok iOS app to a test audience.

Musk claims it’s not a fair fight.

a claim given Against OpenAI and OpenAI’s close collaborator Microsoft, Musk’s lawyers accuse OpenAI of trying to “actively eliminate competitors” like xAI by “taking pledges from investors.” not to fund them.” Musk’s lawyer says OpenAI also unfairly benefits from Microsoft’s infrastructure and expertise, which lawyers describe as a “de facto merger.”

However, Musk often says that X’s data makes xAI superior to its competitors. Last month X changed Privacy policy to allow third parties, including xAI, to train models on X posts.

It should be noted that Musk was one of the first founders of OpenAI and left the company in 2018 after disagreements about its direction. He argued in earlier lawsuits that OpenAI profited from its early involvement, but reneged on the nonprofit’s promise to make the fruits of AI research available to everyone.

OpenAI, not surprisingly, does not agree With Musk’s interpretation of events.

An xAI ecosystem

xAI outlined a vision in which its models would be trained on data from Musk’s various companies, including Tesla and SpaceX, and its models could then improve technology across those companies. According to The Wall Street Journal, it is already strengthening customer support functions for SpaceX’s Starlink internet service and startup he said negotiating with Tesla to provide R&D in exchange for a portion of the automaker’s revenue.

First, Tesla shareholders are protesting these plans. Many sued Musk On Musk’s decision to launch xAI, claiming ownership diverted both talent and resources From Tesla to an entity that actually competes.

Even so, the deals — and xAI’s developer and consumer-facing products — have brought xAI’s revenue to about $100 million a year. It is Anthropic in comparison reported It’s on pace to hit $1 billion in revenue this year, and OpenAI is targeting $4 billion by the end of 2024.

Musk said this summer that xAI is building the next generation of Grok models at its Memphis data center, which appears to have been built in just 122 days and is currently partially powered by portable diesel generators. The company hopes to upgrade its server farm of 100,000 Nvidia GPUs next year; In its press release, xAI said it plans to fully double that number. (Due to their ability to perform many calculations in parallel, GPUs are the preferred chips for training and running models.)

xAI won in November confirmation For 150 MW of additional power from the regional power authority in Memphis – enough to power about 100,000 homes. To win over the agency, xAI pledged to improve the quality of the city’s drinking water and supply the Memphis grid with discounted Tesla-made batteries. But some residents have criticized the move, saying it will strain the network and why it gets worse air quality of the area.

Tesla too is expected using an improved data center to improve autonomous driving technologies.

xAI has expanded quite rapidly from an operational perspective within a year of its inception, growing from just a few employees in March 2023. More than 100 today. Startup in October moved to OpenAI’s old corporate offices in San Francisco’s Mission neighborhood.

xAI has told investors it plans to raise more money next year.

It won’t be the only AI lab raising big bucks. anthropic recently It secured $4 billion from Amazon, bringing the total to $13.7 billion, while OpenAI raised $6.6 billion in October, to bring the war chest to $17.9 billion.

Megadeals like OpenAI’s and Anthropic’s boosted AI venture capital activity to $31.1 billion in Q3 2024 across more than 2,000 deals. per head PitchBook data.

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