Elon Musk's xAI raises $6 billion in Series B funding round

Elon Musk's xAI raises $6 billion in Series B funding round

Billionaire Elon Musk-founded artificial intelligence startup xAI has raised $6 billion in a Series B funding round, which was backed by investors including Andreessen Horowitz and Sequoia Capital among others, the company said in a blog post on May 26.

The funding round saw the participation of Valor Equity Partners, Vy Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal and Kingdom Holding, amongst others apart from Andreessen Horowitz and Sequoia Capital, the startup said in the post.

The money will be used to take xAI's first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said, adding that several technology updates and products will be announced soon.

"There will be more to announce in the coming weeks," Musk said in a post on X, in response to the announcement of the funding.

The AI race has been heating up, with several investors signing big checks for start-ups looking to compete with market leaders like OpenAI.

Though xAI did not say what it was valued at after the latest round of funding, other media reports previously suggested the company would be valued at between $18 billion and $24 billion.

Reuters could not immediately verify the valuation with xAI.

The fundraising, announced in a blog post on May 26, comes less than a year after xAI’s debut and marks one of the bigger investments in the nascent field of developing artificial intelligence tools.

xAI got its start with Musk-owned social media platform X, formerly known as Twitter, where it helped build the Grok AI service. The startup had released Grok-1 on X in November 2023. In March 2024, the company launched Grok-1.5 with "long context capability", before releasing Grok-1.5V with image understanding capacity. The AI firm has also launched open source Grok-1, which will enable "advancements in various applications, optimizations, and extensions of the model".

Musk, who has been an early supporter of artificial intelligence, had supported OpenAI before the launch of ChatGPT in late 2022. However, the billionaire later withdrew from the venture and has advocated cautious development of the technology because of its potential dangers.

With inputs from agencies