Updated December 25 at 12:21 pm Pacific: Added details of xAI’s valuation and Kingdom Holdings’ contribution.
xAI, Elon Musk’s artificial intelligence company, has increase $6 billion in a Series C financing round.
The company announced this week in which Andreessen Horowitz, Blackrock, Fidelity, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, Vy Capital, Nvidia, AMD and others participated.
Kingdom Holdings, Saudi Arabia holding conglomerate, invested approximately $400 million in the round, according to a public presentation. The filing also revealed that xAI is now valued at $45 billion, nearly double its previous valuation.
The new cash brings the total raised by xAI to $12 billion, adding to the $6 billion tranche xAI raised in May.
According According to the Financial Times, only investors who had backed xAI in its previous fundraising round were allowed to participate. Investors who helped finance Musk’s acquisition of Twitter reportedly received access up to 25% of xAI shares.
“xAI’s most powerful model yet… is currently undergoing training and we are now focused on launching innovative new products for consumers and businesses,” xAI saying in a statement. “Funds from this funding round will be used to further accelerate our advanced infrastructure, ship innovative products… and accelerate… research and development.”
Increasing AI
Musk formed xAI last year. Shortly after, the company launched Grok, a flagship generative AI model that now powers a number of features on X, including a chatbot accessible to X Premium subscribers and free users in some regions.
Grok has what Musk has described as “a rebellious streak”: a willingness to answer “spicy questions that are rejected by most other artificial intelligence systems.” If you tell him to be vulgar, for example, Grok will oblige, spitting profanities and colorful language you won’t hear on ChatGPT.
musk has ridiculed ChatGPT and other AI systems for being too “woke” and “politically correct”, despite Grok himself unwillingness to cross certain boundaries and coverage on political issues. He also referred to Grok as a “ultimate seeker of truth” and less biased than competing models, although there are evidence to suggest that Grok leans left.
Over the past year, Grok has become increasingly entrenched in X, the social network formerly known as Twitter. At launch, Grok was only available to X users and developers skilled enough to get the “open source” edition up and running.
Thanks to an integration with xAI’s internal imaging model, Aurora, Grok can generate images in X (controversially without guardrails). The model can also analyze images and summarize news and current events. imperfectlymind.
Reports indicate that Grok may handle even more X features in the future, from improving X’s search capabilities and account bios to helping with post analysis and response settings. X recently gained a “Grok button” designed to help users discover “relevant context” and delve into discussions of trends and events in real time.
xAI is racing to catch up to formidable competitors like OpenAI and Anthropic in the generative AI race. The company launched an API in October, allowing customers to integrate Grok into third-party apps, platforms and services. And it just released a standalone Grok app for iOS for a test audience.
Musk claims it was not a fair fight.
In a lawsuit filed against OpenAI and OpenAI’s close collaborator Microsoft, Musk’s lawyers accuse OpenAI of “actively trying to eliminate competitors” like xAI by “extracting promises from investors.” not finance them.” OpenAI, Musk’s lawyer says, also unfairly benefits from Microsoft’s infrastructure and expertise in what lawyers describe as a “de facto merger.”
However, Musk often says that X’s data gives xAI an advantage compared to its rivals. Last month, X changed its privacy policy to allow third parties, including xAI, to train models on X posts.
It’s worth noting that Musk was one of the original founders of OpenAI and left the company in 2018 after disagreements over its direction. In previous lawsuits it has argued that OpenAI profited from its initial involvement but reneged on its nonprofit promise to make the fruits of its AI research available to everyone.
OpenAI, unsurprisingly, disagrees with Musk’s interpretation of events. In a mid-December press release, the company characterized Musk’s lawsuit as misleading, baseless and a case of sour grapes.
An xAI ecosystem
xAI has outlined a vision under which its models would be trained with data from Musk’s various companies, including Tesla and SpaceX, and the models could then improve the technology at those companies. xAI is already boosting customer support for SpaceX’s Starlink internet service, according to The Wall Street Journal, and the startup is saying be in talks with Tesla to provide R&D in exchange for part of the automaker’s revenue.
Tesla shareholders, for example, oppose these plans. Several have sued Musk over his decision to start xAI, arguing that Musk has diverted talent and resources from Tesla to what is essentially a competing company.
However, the deals, and xAI’s developer and consumer products, have boosted xAI’s revenue to around $100 million a year. In comparison, Anthropic is reportedly on track to generate $1 billion in revenue this year, and OpenAI is targeting $4 billion by the end of 2024.
Musk said this summer that xAI is training the next generation of Grok models at its Memphis data center, which was apparently built in just 122 days and is currently powered in part by portable diesel generators. The company hopes to upgrade the server farm, which contains 100,000 Nvidia GPUs, next year; In a press release, xAI said it plans to completely double that number. (Due to their ability to perform many calculations in parallel, GPUs are the preferred chips for training and running models.)
In November, xAI won approval from the regional power authority in Memphis for 150 MW of additional power, enough to power approximately 100,000 homes. To win over the agency, xAI pledged to improve the quality of the city’s drinking water and provide the Memphis grid with batteries made by Tesla at a discount. But some residents criticized the measure, arguing it would overload the grid and worsen the air quality in the area.
Tesla is also expected Use the upgraded data center to improve your autonomous driving technologies.
xAI has expanded fairly quickly from an operations standpoint in the year since its founding, going from just a dozen employees in March 2023 to more than 100 today. In October, the startup moved into the former OpenAI corporate offices in San Francisco’s Mission neighborhood.
xAI has reportedly told investors that it plans to raise more money next year.
It won’t be the only AI lab to raise a lot of money. Anthropic recently raised $4 billion from Amazon, bringing its total raised to $13.7 billion, while OpenAI raised $6.6 billion in October to increase its war chest to $17.9 billion. million dollars.
Mega deals like OpenAI and Anthropic drove AI venture capital activity to $31.1 billion across more than 2,000 deals in Q3 2024. by PitchBook data.
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