Elon Musk’s artificial intelligence company, xAI, has raised $6 billion in its latest equity financing round, as it aggressively expands in the AI industry.
According to regulatory filings with the US Securities and Exchange Commission (SEC), the funding involved contributions from 97 investors.
However, the filing did not disclose the identities of the backers or provide specific details about the company’s valuation.
The funding round comes as xAI works towards competing with companies like OpenAI and Anthropic. xAI is channelling resources into expanding its supercomputing capabilities in Memphis, Tennessee, with the facility now housing over 100,000 Nvidia GPUs.
The centre, initially constructed in just 122 days, is expected to receive significant upgrades next year, including an additional 150MW power capacity.
xAI, founded by Musk last year, has launched its proprietary generative AI model, Grok, which powers features on X (formerly Twitter).
Grok has received attention for its willingness to tackle unconventional topics, distinguishing it from other AI systems. Musk claims the model is “maximally truth-seeking” and less biased compared to competitors.
In addition to its integration with X, Grok has been embedded into third-party applications via an API launched in October. The company is reportedly developing a standalone app to rival OpenAI’s offerings, set for release in December.
xAI’s business model also leverages synergies across Musk’s other ventures. The AI startup contributes to customer support for SpaceX’s Starlink service and is in discussions with Tesla for research and development collaborations.
Issues have been raised by Tesla shareholders and others, about possible conflicts of interest, alleging that Musk is diverting resources from Tesla to xAI.
Musk has placed xAI as a challenger to OpenAI, a company he co-founded but left in 2018. In a current lawsuit, Musk accuses OpenAI of a monopoly that hinders competition in the AI space. The suit also reveals the strategic advantage OpenAI gains from its partnership with Microsoft.
With these challenges, Musk asserts that xAI’s access to data from X provides a competitive edge. The company recently updated X’s privacy policy, allowing xAI to train its models using social media content.
Since its inception, xAI has grown from a small team to over 100 employees. The company recently relocated to larger offices in San Francisco and plans to raise additional funds in 2025 to sustain its rapid expansion.
The AI funding sector is now highly competitive, with companies like Anthropic and OpenAI securing billions in recent months.
However, Musk’s vision for xAI, coupled with its integration across multiple industries, makes the startup strong in the AI space.
