Elon Musk's xAI has just grossed a whopping $6 billion. A staggering figure. According to a document filed Thursday with the SEC, investors shelled out at least $77,593 each to participate in this funding round.
Among the illustrious names there are Andreessen HorowitzBlackrock, Fidelity, Kingdom HoldingsLightspeed, MGX, Morgan StanleyYES, QIA, Sequoia CapitalValor Equity Partners, Vy Capital, Nvidia e AMD. In short, the elite of finance and technology.
xAI is already worth 50 billion, double what it was 6 months ago
With this injection of fresh money, xAI has now raised a total of $12 billion. And to think that only in November there was talk of a valuation of 50 billion, double compared to six months earlier. A dizzying rise for a company founded just a year ago.
The flagship of xAI it's Grok, a generative AI model which powers several features on X, including a chatbot accessible to Premium subscribers and some free users. Grok stands out for its “rebellious streak”: it is willing to answer uncomfortable questions that other AI systems refuse. Musk called it “in search of the ultimate truth” and less affected by bias than competing models. Furthermore, by generating realistic images via Aurora, it risks becoming a weapon for disinformation.
An explosive growth, amidst controversies and ambitious projects
xAI is racing to make up for lost ground against competitors of the caliber of OpenAI e Anthropic. It launched an API in October and is testing a standalone iOS app for Grok. Musk claims the game is unfair: he accused OpenAI of trying to eliminate rivals like xAI by convincing investors not to fund them.
The vision of xAI is to train its models on data from Musk's various companies, from Tesla to SpaceX, and then improve the technology in all these sectors. Not everyone is thrilled: Some Tesla shareholders have sued Musk, accusing him of diverting talent and resources to what is essentially a competing company.
Despite the controversies, xAI it is generating revenues of around $100 million a year. The company has grown from a dozen employees in March 2023 to over 100 today, and has moved into OpenAI's old offices in San Francisco. Musk has big plans for the future, starting with upgrading his Memphis data center with another 100,000 Nvidia GPUs. But there are those who fear that this could put a strain on the local electricity grid and worsen air quality.
The race for AI
xAI is not the only one to collect astronomical figures: Anthropic has just collected 4 billion from Amazon, bringing the total to 13.7 billion, while OpenAI it raised 6.6 billion in October, reaching 17.9 billion. According to PitchBook data, mega-deals like these pushed venture capital investments in AI to $31.1 billion in the third quarter of 2024. In short, the race for artificial intelligence continues unabated. And with all these billions at stake, you can bet we'll see some good things.
