On December 6, 2024, Elon Musk's artificial intelligence startup xAI announced it has raised $6 billion from 97 investors, according to a regulatory filing. This funding round is aimed at intensifying competition with OpenAI, led by Sam Altman.
xAI, known for its chatbot 'Grok' available on Musk's social media platform X, has seen its valuation rise to $50 billion following this investment. The funding includes $5 billion from sovereign funds in the Middle East and $1 billion from various other investors.
The startup plans to enhance its computing capabilities by expanding its supercomputer facility in Memphis, Tennessee, to accommodate at least one million graphics processing units (GPUs) necessary for training its AI models.
Despite this significant funding, xAI remains smaller than OpenAI, which recently closed a $6.6 billion fundraising round, bringing its valuation to $157 billion. OpenAI is also undergoing a restructuring to transition into a for-profit entity.
Musk, who co-founded OpenAI but later distanced himself from the organization, has filed a lawsuit against Altman and OpenAI, claiming antitrust violations related to its partnership with Microsoft. Musk's legal actions aim to halt OpenAI's shift to a for-profit model, alleging it undermines its original charitable mission.