Highlights:

  • xAI aims to create an advanced artificial general intelligence system that goes beyond the capabilities of current AI.
  • xAI launched its first large language model, Grok-1, in late 2023, followed by Grok-1.5 in April and Grok-2 in August.

Recently, Elon Musk’s AI startup, xAI Corp., secured USD six billion in new equity funding to further expand its supercomputer facility, aiming to accommodate at least 1 million graphics processing units.

In October, reports surfaced that xAI was pursuing additional funding, aiming to raise “several billion dollars” at a valuation of USD 40 billion. Earlier, in May, the company had secured USD 6 billion at a valuation of USD 24 billion.

A report on November 15 indicated that xAI was aiming to raise USD 6 billion at a valuation of USD 50 billion. It stated that the majority of the funding, approximately USD 5 billion, would come from Middle Eastern sovereign funds, with the remaining amount contributed by other investors. Meanwhile, other reports from the same period suggested the deal’s valuation would be closer to USD 45 billion.

The final valuation of the deal remains unclear.

Founded by Musk in 2023, xAI aims to create a cutting-edge artificial general intelligence (AGI) system that exceeds existing AI capabilities. The company emphasizes its commitment to developing a safe and reliable AGI, aligned with Musk’s vision of fostering beneficial, human-centered intelligence.

xAI launched its first large language model, Grok-1, in late 2023, followed by Grok-1.5 in April and Grok-2 in August. The latest Grok-2 model is capable of generating text, debugging code, performing related tasks, and analyzing user-provided images.

A central aspect of xAI’s vision is developing advanced computational processing power. In September, the company announced the completion of “Colossus,” an AI training system equipped with 100,000 Nvidia H100 graphics cards. Musk has described Colossus as the “most powerful AI training system in the world.”

Although 100,000 H100 GPUs might seem sufficient to most observers, Musk has bigger ambitions. In September, he revealed plans to expand Colossus with an additional 100,000 GPUs, half of which are expected to be the more advanced H200 models, surpassing the capabilities of the current H100 GPUs.

As recently as yesterday, reports emerged that xAI plans to expand Colossus, located in Memphis, Tennessee, to accommodate at least 1 million GPUs. However, the specifics of how xAI intends to achieve this scale remain unclear.

Nvidia H100 GPUs are priced at approximately USD 25,000 each, with the more advanced H200 models costing even more. While xAI would likely benefit from significant bulk discounts, acquiring 800,000 H100 or H200 units at USD 25,000 each would amount to USD 20 billion—exceeding the total funding xAI has raised so far.

xAI’s new funding follows a USD 6.6 billion raised by industry leader OpenAI, which was valued at USD 157 billion on October 2. Meanwhile, another major AI player, Anthropic PBC, was reportedly in discussions to secure new funding at a USD 40 billion valuation in September.