What simply occurred? Elon Musk-led AI startup xAI has raised $6 billion in Sequence C funding, valuing the corporate at round $40 billion, up from $24 billion earlier this yr. A number of the notable buyers who participated on this spherical embody semiconductor giants Nvidia and AMD, in addition to main VCs and asset administration corporations, comparable to BlackRock, Constancy, Andreessen Horowitz, Sequoia Capital, and extra.
In whole, 97 buyers have been concerned on this spherical of funding, with the minimal funding per participant pegged at $77,593. Traders have been solely allowed to take part if that they had helped Musk increase funds for his Twitter acquisition in 2022. xAI is reportedly planning to lift extra funds subsequent yr because it strives to compete with Google and OpenAI, which have opened up a considerable lead within the high-stakes generative AI recreation.
Since closing its Sequence B funding spherical in Could 2024, xAI has constructed a high-power supercomputer referred to as ‘Colossus’ and launched its Grok-2 frontier language mannequin with state-of-the-art reasoning capabilities. Colossus is anticipated to make it simpler for xAI to construct and check its AI fashions, together with the aforementioned Grok LLMs that energy a chatbot for X Premium customers and the Flux picture generator.
Believed to be the world’s largest supercomputer, Colossus is powered by 100,000 Nvidia H100 GPUs, every costing upwards of $30,000. xAI plans to make use of a number of the new funds to double the dimensions of Colossus to 200,000 Nvidia Hopper GPUs.
Musk is a crucial participant within the AI sector, having helped discovered OpenAI in 2015. Nevertheless, he left the challenge in 2018 following disagreements with different co-founders, together with Sam Altman, who’s presently the corporate’s CEO. Musk has additionally typically sounded the alarm in opposition to AI, claiming it might destroy humanity with out ample guardrails.
As a part of his persevering with battle in opposition to OpenAI and its founders, Musk sued the corporate earlier this yr, alleging “deceit of Shakespearean proportions.” In accordance with his lawsuit, Altman and one other co-founder, Greg Brockman, violated the founding contract that envisioned OpenAI as a non-profit group devoted to public good.
Altman, nevertheless, rejected all fees, saying Musk was the one who initially wished to ascertain OpenAI as a for-profit firm. In accordance with him, the founding members agreed in 2017 to transform OpenAI right into a for-profit enterprise, however rejected Musk’s demand for majority fairness and the publish of the corporate’s CEO. He additionally alleged that the SpaceX and Tesla CEO is now attempting to thwart OpenAI’s progress to assist his personal fledgling AI startup.
