xAI Backed by Elon Musk Bags $6 Billion to Compete with ChatGPT

  • Editor
  • May 28, 2024
    Updated
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Elon Musk’s artificial intelligence (AI) startup, xAI, has recently raised $6 billion in a Series B funding round, elevating the company’s valuation to $24 billion.

This significant influx of capital is set to accelerate the development and market introduction of xAI’s initial products, as well as build advanced infrastructure and foster future technological advancements.

Founded in July 2023, xAI has made rapid strides in Artificial Intelligence (AI). One of its first major products, the AI-powered chatbot Grok, was launched for X Premium subscribers.

Grok is positioned as a more edgy alternative to OpenAI’s ChatGPT and continues to be developed with enhancements such as long context capabilities and image understanding.

With this news going online, this is what users around the world have to say!

Funding in this round came from several sources, including Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal.

Last year, a filing with the Securities and Exchange Commission showed that xAI was looking to raise up to $1 billion in equity investments. A few months ago, one of the reputable news sites reported that xAI was seeking up to $6 billion, but Musk denied it at the time.

The hardware capable of powering AI development is quite expensive, with Nvidia’s upcoming Blackwell B200 AI graphics cards costing anywhere from $30,000 to $40,000 each.

Last week, a report from The Information indicated that xAI would need 100,000 of Nvidia’s current H100 chips for a supercomputer to power an upgraded version of its Grok AI Chatbot. Musk reportedly told investors that the plan is to launch the new data center by the fall of 2025.

The new funding will be utilized in several key areas. Primarily, it will support the market introduction of xAI’s first products and the development of advanced infrastructure necessary for AI research and deployment.

Additionally, a big portion of the funds will be allocated to the research and development of future AI technologies. This investment is expected to accelerate xAI’s efforts to become a leader in the AI industry, competing directly with major players like OpenAI, Google, and Microsoft.

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Musk, who also co-founded OpenAI in 2015 before leaving the organization in 2018 due to strategic disagreements, has been critical of OpenAI’s direction, especially its partnership with Microsoft. He has filed a lawsuit against OpenAI, claiming it has deviated from its mission to benefit humanity.

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Despite these tensions, Musk’s vision for xAI is clear: to develop truthful, competent AI systems that are maximally beneficial for humanity.

The company is actively hiring engineers and researchers in locations such as Palo Alto, San Francisco, and London to support its rapid growth and ambitious goals.

The substantial investment in xAI highlights the growing interest and confidence in AI technology’s potential. The firm’s focus on developing cutting-edge AI systems and its rapid progression since its inception positions it as a formidable competitor in the AI sector.

For more news and insights, visit AI News on our website.

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Dave Andre

Editor

Digital marketing enthusiast by day, nature wanderer by dusk. Dave Andre blends two decades of AI and SaaS expertise into impactful strategies for SMEs. His weekends? Lost in books on tech trends and rejuvenating on scenic trails.

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