Elon Musk’s xAI Raises $6 Billion To Fund Its Race Against ChatGPT And All The Rest

| Updated on May 30, 2024
elon musk xai startup

Elon Musk is always up to something big. Last summer, he started a new company called xAI. And today they just announced they’ve raised $6 billion. This money is going to help them get their first products out there, build some fancy infrastructure, and speed up their research into future tech.

So far, xAI has come out with Grok, which is like a cooler, edgier version of OpenAI’s ChatGPT. But it’s only available on X (formerly Twitter) and only for X Premium subscribers.

Now, where did all that money come from? A bunch of big names threw in their cash, like Andreessen Horowitz, Sequoia Capital, and even Saudi Arabian Prince Al Waleed bin Talal. Just last year, xAI was looking to raise $1 billion, and just a few months ago, rumors were flying that they were aiming for $6 billion. Elon denied it back then, but it looks like they made it happen.

AI development isn’t cheap, though. The hardware alone is crazy expensive. Nvidia’s upcoming Blackwell B200 AI graphics cards are priced between $30,000 and $40,000 each. And xAI is planning to get 100,000 of Nvidia’s H100 chips for a supercomputer to power an upgraded Grok AI chatbot. Elon told investors they want this new data center up and running by fall 2025.

Competing in the AI world is a big money game. Companies like Google, Apple, Amazon, Microsoft, and Meta are all spending billions on their AI projects. Microsoft even has a multi-billion partnership with OpenAI. And get this: OpenAI’s CEO, Sam Altman, is apparently chasing trillions more to shake up the global chip industry. And Elon? He’s actually suing OpenAI, claiming they’ve lost sight of their mission to help humanity.Beyond xAI and OpenAI, Elon mentioned he’d rather create AI and robotics products outside of Tesla unless he gets more control over things. Speaking of Tesla, their shareholders are voting this week on whether to bring back Elon’s massive $56 billion pay package just before their annual meeting on June 13th.

Charu Thakur