Elon Musk’s artificial-intelligence startup, xAI, has successfully raised $5 billion in a recent funding round, pushing its valuation to an impressive $50 billion—more than double what it was valued just a few months ago.

Rapid Growth in AI Space
Launched in July 2023, xAI has quickly become a formidable player in the AI industry. The latest round of investment has been backed by some of the world’s most influential investment firms, including Qatar’s sovereign-wealth fund, Qatar Investment Authority, Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz. With this new infusion, xAI’s total fundraising for the year reaches $11 billion.

In the spring, the company was valued at $24 billion following a $6 billion funding round. Just a few months later, xAI’s valuation soared by another $26 billion, signaling robust investor confidence in its future growth potential.

Capital to Fuel Expansion
The new capital will be used to enhance xAI’s capabilities, particularly through the purchase of 100,000 Nvidia chips to further train its AI models. This comes as the company reported a revenue of $100 million on an annualized basis, a significant milestone since its debut.

xAI’s flagship product, the Grok chatbot, is already available to premium subscribers of Musk’s social media platform, X. In recent months, the company has also expanded Grok’s availability to business customers. As competition intensifies in the AI sector, Musk’s ambition to rival OpenAI—co-founded by Musk in 2015—remains a key focus, especially after a highly publicized legal battle with OpenAI’s leadership over alleged fraud and antitrust violations.

AI Race Heats Up
Musk is positioning xAI’s Grok model to compete with industry giants such as OpenAI’s ChatGPT, Anthropic, and Google. The company is set to release the third version of Grok in December, with Musk claiming it will be “the world’s most powerful AI by every metric.”

With its data center in Memphis, Tennessee, housing 100,000 Nvidia chips and plans for expansion, xAI continues to ramp up its capabilities, with Musk focused on securing a leading edge in the AI race.

For more details, visit The Wall Street Journal.