Elon Musk’s xAI raises $6 billion to compete with ChatGPT & others

Elon Musk’s AI startup, xAI, has raised $6 billion to compete with ChatGPT and other AI technologies, as per a blog post. Founded in March 2023, xAI announced the funding to help launch its first products, build advanced infrastructure, and speed up research and development of future technologies.

xAI has introduced Grok, a competitor to OpenAI’s ChatGPT, available to X Premium subscribers on the platform. The funding round included contributions from investors like Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal. Last year, xAI aimed to raise $1 billion.

A recent report indicated that xAI would need 100,000 of Nvidia’s current H100 chips to power a supercomputer for an upgraded Grok AI chatbot. Developing AI requires expensive hardware, such as Nvidia’s upcoming Blackwell B200 AI graphics cards, which cost between $30,000 and $40,000 each. Musk plans to launch the new data centre by fall 2025.

Big tech companies have invested billions in AI startups like Anthropic, while also developing their own AI projects. Microsoft has partnered with OpenAI, whose CEO Sam Altman is seeking additional funds to revamp the global chip industry.