Elon Musk’s artificial intelligence company, xAI, recently secured $15 billion in funding from investors. This fresh funding adds another $5 billion to the $10 billion round that CNBC reported on in September, which had already valued the startup at $200 billion. The company plans to use this capital to buy graphic processing units, which are crucial for developing its large language models.
AI startups have seen their valuations soar recently as they raise large amounts of capital. This investment spree is driven by the seemingly endless need for foundational AI models. For instance, in September, AI company Anthropic closed a $13 billion funding round, tripling its value since March. Sam Altman’s OpenAI also completed a $6.6 billion share sale in October, pushing its valuation to $500 billion. Last month, the ChatGPT creator was preparing for an IPO that could value it at $1 trillion.
XAI is busy building large data centers filled with tens of thousands of AI chips to power its supercomputer. However, the company faces opposition in Memphis from environmental and civil rights groups. These groups are trying to stop xAI from using a gas-burning turbine to power its data center.
Last week, Tesla shareholders approved Musk’s massive pay package, valued at nearly $1 trillion. They also voted on a proposal for Tesla to invest in xAI. Brandon Ehrhart, Tesla’s general counsel, stated that more votes supported the proposal than opposed it. However, he also noted the abstentions and mentioned that the company is considering its next steps on the issue. This March, xAI acquired Musk’s social network X in an all-stock deal. That transaction valued the platform at $33 billion.
