one year on
xAI raises $6B in Series B at $18B pre-money valuation
Elon Musk's AI startup, founded last year, secures massive funding from top-tier investors to compete with OpenAI, Microsoft, and Alphabet.
xAI, Elon Musk’s artificial intelligence startup, announced today it has raised $6 billion in a Series B funding round, with a pre-money valuation of $18 billion. The round includes investments from Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, and Kingdom Holding, among others.
The company plans to use the funds to bring its first products to market, build advanced infrastructure, and accelerate research and development. The funding comes less than a year after xAI was founded, and follows the release of its Grok chatbot, which is currently available to Premium+ subscribers on X, the social network Musk also owns.
Musk has been vocal about his criticism of OpenAI, which he co-founded, and has accused the company of abandoning its mission. The new capital will allow xAI to compete more aggressively with OpenAI, Microsoft, and Alphabet in the AI space. However, observers note that Grok has already faced issues with hallucination and generating misleading information, raising questions about the company’s stated goal of building truthful AI systems. Grok’s news summary feature on X is reported to hallucinate and generate misleading information, even as the company says it aims to develop truthful AI systems.
xAI said in a blog post it plans to take its first set of products to market, build advanced infrastructure and accelerate the research and development of future technologies.
One year later — open only if you can handle spoilers
The funding set the stage for xAI's rapid expansion, including the construction of the Colossus supercomputer cluster. The company would later face scrutiny over data usage and safety practices, but continued to grow its user base and model capabilities.