Elon Musk founded xAI last summer and announced today that it has raised $6 billion in funding. These funds will help launch the company's first products, build advanced infrastructure, and accelerate research and development of future technologies. So far, xAI has launched Grok, a slightly wilder version of OpenAI's ChatGPT, which is currently only available to subscribers of the X Premium service (formerly known as Twitter).
Elon Musk, the king of innovation and occasional Twitter spectacles, returns to the scene with a new initiative – xAI. With $6 billion in funding raised, Musk appears to be aiming to take the reigns in artificial intelligence. But what exactly is he up to with this money?
xAI, the company Musk founded last summer, has so far launched Grok — a chatbot that's said to be more daring and untamed than OpenAI's ChatGPT. This is currently only available to subscribers of the X Premium service, which already indicates the exclusivity and premium approach of the company.
Funding for this venture came from various sources, including Andreessen Horowitz, Sequoia Capital and Saudi Prince Al-Waleed bin Talal. Although a filing with the Securities and Exchange Commission (SEC) last year indicated that xAI was seeking up to $1 billion in equity investment, things turned upside down this summer when Financial Times reported that the company is seeking as much as $6 billion. Musk denied the claims at the time, but apparently the wheel of fortune has turned in his favor.
Artificial investing
Developing artificial intelligence is not a cheap pastime. The latest Nvidia Blackwell B200 AI graphics cards cost between $30,000 and $40,000 each. A report by The Information says that xAI will need as many as 100,000 of the current Nvidia H100 chips for the supercomputer to run the upgraded version Grok AI Chatter. Musk confided to investors that the plan is to launch the new data center by the fall of 2025.
A race for chips, talent and technology
The race for chips, talent and technology is extremely expensive. Big tech firms have poured billions of dollars into AI startups like Anthropic, and Google, Apple, Amazon, Microsoft, and Meta are pouring countless resources into their own AI projects. Microsoft also struck a multibillion-dollar partnership with OpenAI, whose CEO, Sam Altman, is said to be pursuing trillions of dollars to overhaul the global chip industry. Musk, who co-founded OpenAI, is now suing the company, claiming it abandoned its mission to benefit humanity.
Conclusion
Besides xAI and OpenAI, Musk says he would “prefer to develop products outside of Tesla” in AI and robotics unless he gets more control. Tesla shareholders will begin voting this week on whether to renew Musk's $56 billion pay scheme ahead of the June 13 annual meeting.
Elon Musk proves once again that when it comes to big dreams and even bigger goals, he has no real competition. But whether his AI feat will change the world or just be another spectacle in a series of his feats remains a question that only time will tell.
