Elon Musk’s xAI raises $6 billion in new funding

Written by Kate Conger

The artificial intelligence company founded by Elon Musk, xAI, said on Monday that it had raised $6 billion, giving the startup a major lift as it competes with rivals, including OpenAI.

The company said on its website that it would use the money to continue building its infrastructure and accelerate research and development. BlackRock, Fidelity, Sequoia Capital and others participated in the funding round.

“A lot of compute is needed,” Musk said of the investment round in a post on X.

The fundraising could value xAI at $35 billion to $40 billion, up from $24 billion earlier this year, The New York Times previously reported.

Musk and xAI did not immediately respond to requests for comment.

Musk is trying to play catch up on AI. The billionaire, who also leads other companies, including Tesla, X and SpaceX, publicly debuted xAI last year, well after a boom in the AI industry spawned dozens of products that could create text, images and even videos.

Musk quickly built what he said would be the world’s largest supercomputer in Memphis, which powers Grok, xAI’s chatbot. Grok is available to subscribers on X.

Musk helped found OpenAI, but walked away from it in 2018 after disagreements with other co-founders, including Sam Altman, its CEO.

Musk has sued OpenAI to block it from transforming itself from a nonprofit into a for-profit company, saying that Altman and another co-founder, Greg Brockman, had breached the company’s founding contract by putting commercial interests before the public good. OpenAI has argued that the lawsuit is an attempt to hamstring the company while Musk builds a rival.

(The New York Times has sued OpenAI and Microsoft for copyright infringement of news content related to AI systems. OpenAI and Microsoft have denied those claims.)

Musk has argued that AI could destroy humanity, but that he has the ability to build it more safely.

To jump-start xAI, Musk has trained its AI on data from X. Several investors in Musk’s bid to acquire X in 2022 have also provided funding for the AI startup, including the venture capital firm Andreessen Horowitz and the Saudi Arabian Prince Alwaleed Bin Talal’s investment company, Kingdom Holding. X has raised more than $12 billion in total.

This article originally appeared in The New York Times