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Elon Musk's xAI Raises $6B in Largest Round to Build Supercomputer, Eyes $10B Oracle Deal

May 27, 2024, 07:10 AM

Elon Musk's artificial intelligence startup, xAI, has raised $6 billion in a Series B funding round, achieving a pre-money valuation of $18 billion and a post-money valuation of $24 billion. The funding round, reportedly the largest investment round of all time, included prominent investors such as Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, and Kingdom Holding. The capital will be used to bring xAI's first products to market, build advanced infrastructure, and accelerate research and development of future technologies. Musk plans to build a supercomputer, referred to as a 'gigafactory of compute,' using 100,000 specialized NVIDIA GPUs, which will be at least four times larger than the biggest AI clusters today. This supercomputer aims to power the next version of xAI's AI chatbot, Grok, which can process both visual and text information. The supercomputer is expected to be operational by the fall of 2025. Additionally, xAI is reportedly in talks with Oracle for a potential multiyear cloud-computing deal worth $10 billion. For comparison, OpenAI is valued at $80 billion.