Musk’s xAI raises $6 billion as it plans ‘massive supercomputer’

Tesla chief executive Elon Musk’s artificial intelligence (AI) startup xAI has raised $6 billion in a Series B round led by investors including Andreessen Horowitz and Sequoia Capital, the company said in a blog post.

The company behind the Grok range of AI models plans to use the funds to take xAI’s “first products to market, build advanced infrastructure, and accelerate the research and development of future technologies.”

“There will be more to announce in the coming weeks,” Musk posted on social media platform X (formerly Twitter) in response to xAI’s post announcing the fundraising.

Grok was integrated into X and launched in November.

“From the announcement of the company in July 2023, to the release of Grok-1 on X in November, to the recent announcements of the improved Grok-1.5 model with long context capability, to Grok-1.5V with image understanding, xAI’s model capabilities have improved rapidly,” the company said in the blog.

The startup did not give details of its valuation in the blog post, but Musk posted in another response to the original post announcing the funding that the pre-money valuation was $18 billion.

Valor Equity Partners, Vy Capital, Fidelity Management and Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, among others took part in the fundraising, the company said.

Musk’s latest move to shore up the AI startups comes amid intense rivalry in the space between tech titans Microsoft and Google

On Sunday, The Information reported that Musk is planning to build a massive supercomputer, dubbed “gigafactory of compute”

Musk had earlier said that xAI would need 100,000 specialized semiconductors to train and run the next version of its conversational AI Grok, the report said.

To make the chatbot smarter, Musk had told investors during a presentation this month that the startup plans to string these chips into a “single, massive computer”

He’s said that he wants the supercomputer up and running by the fall of next year, the report added.

ChatGPT maker OpenAI this month rolled out a faster and cheaper version of its flagship AI model, dubbed GPT-4o, which includes a voice assistant mode.

A day after ChatGPT announced GPT 4o, Google announced its Project Astra at Google I/O 2024. Both AI models can answer human queries in real-time and are designed for more natural interactions.