Elon Musk’s xAI, an ambitious venture aimed at unraveling the mysteries of the universe through artificial intelligence (AI), is in the process of securing a substantial $6 billion in funding, which will push its valuation to an impressive $50 billion, according to a report by CNBC’s David Faber. The funding round, expected to conclude early next week, includes a significant $5 billion commitment from sovereign wealth funds in the Middle East, with an additional $1 billion coming from various other investors, some of whom are looking to increase their stakes.
The capital injection is earmarked for a strategic acquisition of 100,000 Nvidia (NVDA) chips, aimed at bolstering the computational capabilities of xAI, particularly for Tesla’s Full Self Driving system, which is expected to leverage the newly established supercomputer in Memphis.
Launched in July 2023, xAI’s mission is to delve into the fundamental understanding of the universe. A key product of this endeavor is the Grok chatbot, introduced in November, which xAI states was inspired by “The Hitchhiker’s Guide to the Galaxy.” Despite its relatively short training period of two months, Grok was designed to access real-time internet knowledge, positioning it as a direct competitor to the likes of ChatGPT by OpenAI, Google’s Bard, and Anthropic’s Claude.
The timing of this funding round coincides with significant political changes in the U.S., as Donald Trump has been elected President. Musk, now part of Trump’s inner circle, is poised to influence the new administration’s tech and AI policies. Trump’s campaign has voiced intentions to reverse Biden’s executive order on AI, criticizing it for stifling innovation and imposing what they describe as radical leftwing ideas. Instead, Trump aims to foster AI development that champions free speech and human flourishing.
This development not only underscores xAI’s rapid growth and strategic importance in the AI sector but also highlights the intersection of technology and politics, with Musk playing a pivotal role in shaping the future of AI under the new Trump administration.
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