Musk’s xAI secures $6 Billion in series C funding, raising company value to $45 Billion
Elon Musk’s artificial intelligence company, xAI, has raised $6 billion in a Series C funding round, nearly doubling its valuation to $45 billion. The financing round attracted an impressive roster of investors, including Andreessen Horowitz, BlackRock, Fidelity, Lightspeed, Nvidia, and AMD. Saudi conglomerate, Kingdom Holdings, was also part of the roster and contributed $400 million, according to public filings.
This latest cash injection brings xAI’s total funding to $12 billion, following a $6 billion raise in May 2024. Notably, participation in the latest round was limited to existing investors, some of whom had also backed Musk’s acquisition of Twitter (now X) in 2022.
Founded just last year, xAI has rapidly made its mark on the AI landscape with its flagship model, Grok. Musk describes the LLM as having a “rebellious streak,” positioning it as an alternative to what he calls “politically correct” AI systems.
The next stage
The funds are expected to accelerate the development of Grok, which powers several features on X, including a chatbot available to X Premium subscribers. The model also integrates with xAI’s image-generation platform, Aurora, allowing users to create and analyze images without any guardrails.
According to xAI, the funding will also support advanced infrastructure, groundbreaking product launches, and accelerated research and development. The company is reportedly training the next generation of Grok models at its Memphis data center, which houses 100,000 Nvidia GPUs and is set to double in capacity by next year.
A growing ecosystem
In Musk’s future plans, xAI has a symbiotic relationship with his other ventures including Tesla and SpaceX. The model is already helping with customer support on SpaceX’s Starlink platform, and discussions are underway to integrate xAI’s capabilities into Tesla’s R&D pipeline.
However, this has raised concerns among Tesla shareholders, some of whom have filed lawsuits claiming that Musk is diverting resources from the automaker.
Despite these controversies, xAI has made rapid progress. It has expanded from a team of 12 employees in early 2023 to over 100 today and recently moved into OpenAI’s former San Francisco headquarters. Moreover, the company’s revenue has reportedly reached $100 million annually.
That said, the company is still a long way from competitors like OpenAI and Anthropic, which are looking at revenues of $4 billion and $1 billion, respectively, in 2024.
