Elon Musk-led artificial intelligence (AI) startup xAI disclosed on Thursday that it has raised $6 billion, with nearly 97 investors participating in the fundraising round.
What Happened: xAI's latest fundraise comes at a time when the AI startup is looking to expand the footprint of its Colossus supercomputer tenfold – from its existing cluster of 100,000 Nvidia graphics processing units, or GPUs, xAI intends to increase it to more than a million.
In its filing with the U.S. Securities and Exchange Commission (SEC,) xAI disclosed that investors bought equity for a minimum of $77,593.
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It's not clear what the AI startup is valued at after this round of funding, but previous reports suggested that the Musk-led company was aiming to double its valuation from $24 billion. This move is aimed at closing the gap with competitors such as Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) subsidiary Google, OpenAI, and Jeff Bezos-backed Anthropic.
Reports suggest that xAI has already commenced the expansion of its Colossus supercomputer in its Memphis facility.
Why It Matters: xAI has raised $12 billion so far this year – the first instance was in May and the funding round included prominent investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding.
While xAI has not disclosed the list of investors in the new funding round, some of the prominent investors from the previous round were expected to participate, according to a report by the Wall Street Journal.
The relationship between xAI and Tesla Inc. (NASDAQ:TSLA) is also important. According to a Morgan Stanley analyst, the AI capabilities developed by xAI are crucial for Tesla’s future in robotics, autonomy, and manufacturing.
Musk has continued to remain vocal in his criticism of rival OpenAI, led by Sam Altman. He filed for an injunction on Dec. 1 to prevent OpenAI from transitioning to a for-profit entity.
xAI's fundraising comes two months after Microsoft Corp.-backed (NASDAQ:MSFT) OpenAI raised $6.6 billion at a valuation of $157 billion.
While xAI is a private company, investors can now use Cathie Wood's ARK Venture Fund (NASDAQ:ARKVX) to benefit from the growth of Musk-led AI company.
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