Billionaire tech mogul Elon Musk’s startup xAI announced it raised $6 billion in its latest funding round as it continues to compete in the increasingly crowded artificial intelligence market.
The company, which is best known for its Grok chatbot, secured backing from prominent U.S. venture capitalists, as well as chipmakers NVIDIA and AMD, and investment funds from Saudi Arabia, Qatar, and others.
While Musk has long warned that AI poses risks to humanity, he is pushing aggressively for a larger share of the sector’s investment. xAI had previously raised $6 billion in May, and with this latest round, the company is now valued at an estimated $50 billion, though still significantly smaller than its main competitor, OpenAI, which is valued at $157 billion.
Despite the high valuations, critics have raised concerns over the significant costs AI companies are incurring without a clear path to profitability.
In announcing the funding on Monday, xAI said it would use the capital to “ship groundbreaking products that will be used by billions of people” and to “accelerate research and development of future technologies aimed at understanding the true nature of the universe.”
Musk, who also leads SpaceX and Tesla, and is a key supporter of U.S. president-elect Donald Trump, noted on his X account that “a lot of compute is needed” to power AI products.
Launched in July 2023, xAI was founded shortly after Musk signed an open letter urging a pause in the development of advanced AI models. Musk is also involved in a legal battle with OpenAI, the company he co-founded in 2015 as a non-profit before it transitioned to a for-profit model in 2018, claiming the change violates prior legal commitments.
AFP
