Elon Musk’s xAI Secures $6 Billion in Funding, Plans to Build AI Supercomputer

Elon Musk’s AI startup xAI has announced a successful Series B funding round, raising $6 billion from investors including Andreessen Horowitz, Sequoia Capital and Saudi Arabia’s Kingdom Holding. The substantial funding will help xAI bring its first products to market, build advanced infrastructure and accelerate research and development of future technologies.

Musk revealed xAI’s pre-money valuation of $18 billion, highlighting investor confidence in the company’s potential. The startup has already launched Grok, an AI chatbot available to X Premium subscribers on the platform formerly known as Twitter.

The investment is timely as xAI is reportedly looking to construct its very own AI supercomputer by the end of 2025. Per The Information, xAI would require 100,000 of Nvidia’s (NASDAQ: NVDA) current H100 chips to construct the supercomputer, which would be used to support an advanced version of its Grok AI chatbot.

The computer hardware needed to develop AI is not cheap as Nvidia’s (NASDAQ: NVDA) upcoming Blackwell B200 AI graphics cards are expected to cost $30,000 to $40,000 apiece. As the race to develop AI heats up, xAI’s successful funding round should help it keep pace with industry heavyweights OpenAI, Google (NASDAQ: GOOG), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Meta (NASDAQ: META), which are also pouring billions of dollars into AI development.

Musk, who is a co-founder of OpenAI, is currently in litigation against the company and has said that it has effectively given up on its original mission to act in the best interest of humanity. With the $6 billion war chest, xAI should be able to carry out its own lofty goals and determine how best AI should be developed.