AI race: Elon Musk's xAI raises six billion US dollars

The AI start-up xAI, founded by Elon Musk, has received six billion US dollars in funding. The company announced this on the weekend. "The funds from the funding round will be used to bring xAI's first products to market, build an advanced infrastructure and accelerate the research and development of future technologies," the company announced in a blog post on Sunday. The financing round was supported by investors such as Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding.

xAI was founded by Musk in July 2023. Employees from OpenAI, Google and the University of Toronto, among others, have been hired for the project. Last year, xAI launched its Grok model, "a supposedly more sophisticated version of OpenAI's ChatGPT", as the US tech portal The Verge writes. With the open-source release of Grok-1, the doors have been opened for further developments in various applications, optimizations and extensions of the model, writes xAI. Until now, the Grok chatbot has only been available to X Premium subscribers via the X platform, formerly known as Twitter.

With the money now raised, xAI's valuation climbs to 24 billion US dollars , according to the news agency Reuters. Before the financing round, it was valued at 18 billion US dollars, as Musk announced in a post on X.

Musk plans supercomputer

The billion-dollar cash injection comes just a few days after Musk announced to investors that he wanted to build the world's largest supercomputer for his AI start-up xAI to operate the next version of the AI chatbot Grok. According to a report by tech portal The Information, Musk said the planned supercomputer should be operational by fall 2025 and will be at least four times the size of the supercomputers used by Meta to train its AI models. In the development of the new supercomputer, xAI could collaborate with the US company Oracle. According to The Information, Musk wants to connect 100,000 of the current H100 chips from Nvidia for the new supercomputer. Their unit price exceeds 30,000 US dollars.

This figure clearly illustrates the huge sums required for the hardware alone in the increasingly fierce AI competition. In addition to the resources that Google, Apple, Amazon, Microsoft and Meta are putting into their own AI projects, the major technology companies are investing billions in AI start-ups. Microsoft has invested billions of US dollars in OpenAI and uses the ChatGPT manufacturer's technology in its productivity software. In January, it was announced that OpenAI CEO Sam Altman plans to raise billions of US dollars for the construction of AI chip factories. At the end of February, Microsoft also announced a new multi-year partnership with AI startup Mistral to accelerate AI innovation. Shortly afterward, it was announced that Amazon was investing a further 2.75 billion US dollars in Anthropic.

(akn)