MassiveFinancing Obtained by xAI to the Tune of $6 Billion

In a significant move, Elon Musk's AI startup, xAI, has secured an additional $6 billion in funding, bringing its total funding to $12 billion. This was announced in a Series B financing round in May 2024, with prominent firms such as A16Z, Sequoia Capital, and the Saudi Public Investment Fund (PIF) among the investors.

The latest round of funding follows xAI's ambitious plans to deploy at least 1 million GPUs and expand into the gaming industry. In September, the company launched Colossus, an AI training cluster powered by 100,000 Nvidia H100 GPUs. Musk has also announced plans to double the capacity of Colossus to 200,000 GPUs.

The gaming studio under xAI's umbrella aims to "make games great again." This expansion was announced in addition to the aim to deploy at least 1 million GPUs.

However, the rapid expansion of xAI has drawn criticism from environmental groups. In August, activists accused xAI of worsening ecological conditions in Memphis, Tennessee, by allegedly using gas turbines without proper permits to power its data center.

Musk's AI startup, xAI, has also been embroiled in a legal battle with OpenAI. Musk initially filed a lawsuit against OpenAI in March 2024, alleging that the company violated its founding mission to develop technology for humanity's benefit rather than profit. The lawsuit is aimed at halting the commercialization of OpenAI and Musk has expanded the list of defendants to include Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member Di Templeton.

Despite temporarily withdrawing the suit in June, Musk reinstated it in August. The lawsuit is currently ongoing, with the future of both companies' AI development at stake.

Reports in November suggested a potential deal valuing xAI at $50 billion, marking a significant increase from earlier estimates in October that placed its valuation at $40 billion. As xAI continues to expand and push the boundaries of AI technology, it remains to be seen how this legal battle and its environmental impact will shape its future.