Elon Musk’s AI company, xAI, has successfully secured $6 billion in funding, marking a major development for the company. This latest funding round increases the company’s valuation to $50 billion, more than doubling its previous valuation of $24 billion in May 2024. The $6 billion is divided into two parts: $5 billion from Middle Eastern sovereign wealth funds and $1 billion from other investors, some of whom are new, while others are renewing their previous commitments. All deals are expected to close by next week.
The funds raised will be used to purchase 100,000 Nvidia chips that will power the Memphis supercomputer. This supercomputer will play a key role in advancing Tesla’s Full Self-Driving (FSD) cars by providing the necessary computational power for their AI systems. The chips will be vital to support Tesla’s self-driving technology, marking a significant connection between xAI’s AI capabilities and Tesla’s automotive goals.
Since its launch in July 2023, xAI has made impressive strides. It began with the introduction of its AI chatbot, GrokAI, designed to compete with other major AI platforms like ChatGPT and Gemini. The company quickly followed up with two updated versions—Grok AI 2 and GrokAI Mini—both featuring image generation capabilities. While GrokAI has been available only to paid users, xAI is currently testing a free version that will soon be accessible to a wider audience.
xAI Secures $6 Billion Funding to Power AI Innovation and Tesla’s Full Self-Driving Development
A major achievement for xAI is the development of the xAI Colossus, the world’s largest AI supercomputer. In early November 2024, the company received approval from the Tennessee Valley Authority (TVA) to significantly increase its power supply.
The supercomputer, which initially received 8 megawatts (MW), will now have access to 150 MW from the state’s grid, enabling it to more efficiently train GrokAI’s large language models. Though this demand for power has raised concerns among local activists, experts believe that 150 MW is a conservative estimate, given that the system would require about 155 MW to run the 100,000 GPUs.
The development of the xAI Colossus supercomputer is an important step in supporting the company’s AI research and its broader technological goals, including the enhancement of Tesla’s self-driving technology. While the project faces challenges, such as the large energy requirements, it underscores xAI’s ambitious plans to push the boundaries of AI innovation and contribute to major advancements in both the AI and automotive industries.
