Elon Musk’s artificial intelligence startup, xAI, has secured an additional $6 billion in its latest funding round, attracting investments from U.S. venture capitalists, chipmakers NVIDIA and AMD, and investment funds from Saudi Arabia and Qatar.
This funding comes as xAI aims to carve out a niche in the competitive AI market, which is currently dominated by companies like OpenAI.
Launched in July 2023, xAI is the creator of the Grok chatbot and is now valued at around $50 billion, positioning it as one of the most valuable startups globally. However, it still lags behind OpenAI, which boasts an estimated valuation of $157 billion.
In its funding announcement on Monday, xAI revealed that the capital would be used to develop “groundbreaking products” for billions of users and to “accelerate research and development of future technologies” to support the company’s mission of understanding the universe’s true nature.
Musk, who also leads SpaceX and Tesla, emphasized the significant computational power required to fuel AI advancements. On his X account, he stated, “A lot of compute is needed” to support AI products.
Despite the ambitious goals, critics have pointed out ongoing challenges in the AI industry, such as high cash burn rates and uncertain paths to profitability. Musk’s push for AI dominance contrasts with his earlier warnings about the potential risks AI poses to humanity.
Earlier in May, xAI raised $6 billion in an initial funding round. Musk has been vocal about his desire to capture a larger share of AI investment, even as he is embroiled in a legal dispute with OpenAI.
Musk co-founded OpenAI in 2015 as a non-profit but left in 2018 and has since accused the organization of breaching commitments by transitioning into a for-profit entity.
Musk’s AI ventures come shortly after he signed an open letter urging a pause on the development of advanced AI models, highlighting his complex and sometimes contradictory stance on the technology.
