Elon Musk's xAI raises huge funds to compete against Google, OpenAI and Microsoft

The enthusiasm in investing AI startups remains unabated. Today, xAI, the generative AI startup founded by former OpenAI founder and later critic Elon Musk, reported that it had raised an astonishing $6 billion in a Series B fundraising round.

Musk, who also owns Tesla, SpaceX, and X (previously Twitter), left OpenAI in 2018, a few years after its inception. He has since been publicly critical of OpenAI, and in March, he launched a lawsuit against the business, claiming it violated its contract to be a non-profit organization.

Musk first unveiled xAI in July 2023. In November 2023, he released the initial version of Grok, an AI chatbot, to a restricted number of individuals. Grok is now available to X customers who sign up for a premium plan. In April, XAI updated the chatbot to Grok-1.5V, which now supports vision and text prompts.

According to today's blog post, xAI is working on "multiple exciting technology updates and products" that will be announced soon. The funding from the round will support xAI's initial product launch, infrastructure development, and future technology research.

A recent story suggests that xAI is creating a new supercomputer to power the next version of Grok, though this has yet to be confirmed. The supercomputer is expected to be operational by the end of 2025, and it will require Nvidia H100 GPU clusters that are four times the size of current AI GPU clusters.