Musk's AI startup xAI nets $6 billion

Elon Musk's artificial intelligence startup xAI, which created the chatbot Grok, has secured $6 billion in funding led by well-known investors in Silicon Valley. This makes it the second-largest investment in the fast-changing AI field.

The funds from the round will be used to bring xAI's first products to market, build advanced infrastructure, and accelerate the research and development of future technologies, the company announced in a blog post.

The company also said that it will soon announce "multiple exciting technology updates and products."

Among the investors who participated in the round were Andreessen Horowitz, Sequoia Capital, Fidelity Management, Equity Partners, and Vy Capital. Musk said that the company's pre-money valuation was $18 billion.

This is the second-largest funding in an AI startup, surpassed only by Microsoft's $10 billion investment in OpenAI at the beginning of 2023.

Founded in July 2023, xAI created the chatbot Grok, which is now available for the Premium+ subscribers of X, formerly Twitter.

In April, the company announced its first-generation multimodal model, Grok-1.5V, which can process visual information, including documents, diagrams, charts, screenshots, and photographs.

Last week, The Information reported that Musk, who co-founded Open AI and has since been active in the field of AI, is planning to build a massive computer he calls the "Gigafactory of Compute." Musk told investors in a presentation that the supercomputer would start running by the fall of 2025.

When finished, it would be at least four times bigger than the biggest GPU clusters existing today. According to The Information, the massive supercomputer would be powered by 100,000 of the most sought-after chips in AI training – Nvidia's H-100.