Advertisement
Elon Musk’s artificial intelligence startup, xAI, is making big moves to expand, and it’s now seeking up to $12 billion in fresh funding, according to a report published by The Wall Street Journal on Tuesday.
The effort to raise this massive amount of money is being led by Valor Equity Partners, an investment firm that has a long-standing relationship with Musk. The firm’s founder, Antonio Gracias, has worked closely with Musk for years, including during his time at Tesla and SpaceX. Gracias is now said to be in active talks with lenders and financial institutions to secure the necessary funds to help Musk’s new AI company grow.
So, what will xAI do with all this money if they get it?
According to sources familiar with the situation, the majority of the funds would go toward buying a huge number of advanced computer chips made by Nvidia, the tech company behind the most powerful chips used in AI development today. These chips are essential for running large-scale AI operations, such as training and improving language models like xAI’s chatbot, Grok.
But xAI won’t just be buying the chips for regular use. Instead, the company plans to build a brand-new data centre that will be filled with these high-performance chips. This facility would serve as the backbone for training and powering Grok, which is Musk’s answer to OpenAI’s ChatGPT and Google’s Gemini.
Interestingly, the plan includes leasing the Nvidia chips back to xAI, which means that the chips will be owned by a different entity or investor and subsequently rented by xAI for its operations. This approach could help reduce upfront costs while still giving the company access to the hardware it needs.
Grok, which is integrated with Musk’s social media platform X (formerly Twitter), is still developing, but Musk has been vocal about wanting it to become one of the most powerful and advanced chatbots in the world. This funding push signals just how serious Musk is about making xAI a major player in the booming AI industry.
While xAI hasn’t officially confirmed the $12 billion target, and final terms of the funding could still change, this major investment effort shows that Musk is betting big on the future of AI, and he’s doing it fast.