Recently, tech billionaire Elon Musk raised about six billion dollars in a Series C funding round for his company, xAI. This company aims to develop AI models that compete with those from OpenAI, Meta, and others. The investors in this round include Sequoia Capital, Nvidia, and AMD.
Additional investors are Andreessen Horowitz, Morgan Stanley, BlackRock, Fidelity, Saudi Arabia’s Kingdom Holding, the sovereign wealth funds of Oman and Qatar, Lightspeed Venture Partners from California, Valor Equity Partners from Chicago, Vy Capital from Dubai, and tech investor MGX from the United Arab Emirates.
Nvidia and AMD as Strategic Partners
In a blog post, xAI highlighted that Nvidia and AMD would support the company as strategic investors, helping to further scale xAI’s infrastructure. This includes the supercomputer Colossus, which in its initial version was completed with an impressive 100,000 Nvidia H100 (Hopper) accelerators. This supercomputer trains the AI model behind the xAI chatbot Grok. xAI now announces that Colossus’s capacity is planned to grow to 200,000 H100 accelerators, utilizing Nvidia’s Ethernet networking platform, Spectrum-X.
Back in May, xAI also raised six billion dollars in its previous Series B funding round. Musk’s competitor, OpenAI, agreed with its investors in its latest funding round to shed its non-profit status. Musk, who co-founded OpenAI in 2015, is now fighting this decision in court. According to a Financial Times report, during the last funding round for OpenAI, Elon Musk complained that a condition for the investors was that they should not invest their money in other AI companies. This condition is said to affect Musk’s own AI company, xAI, as well.
Elon Musk’s involvement in the AI sector is marked by both competition and collaboration. While he once co-founded OpenAI, he now focuses on advancing xAI, aiming to push the boundaries of artificial intelligence technology. The involvement of major tech companies like Nvidia and AMD indicates a strong commitment to developing cutting-edge AI infrastructure.
The expansion of the Colossus supercomputer is a significant step for xAI, as it seeks to enhance its computational capabilities. By doubling the number of accelerators, xAI aims to improve the performance and efficiency of its AI models. Nvidia’s Spectrum-X platform will play a crucial role in optimizing the networking capabilities of this expanded infrastructure.
The investment from a diverse group of financial backers highlights the growing interest and confidence in AI technologies. With funds from both traditional venture capital firms and sovereign wealth funds, xAI is well-positioned to continue its development and compete with established players in the AI field.
Elon Musk’s legal battle regarding OpenAI’s change in status underscores the complex dynamics within the AI industry. As companies evolve and adapt to new market conditions, strategic decisions can lead to significant shifts in partnerships and competitive landscapes.
Overall, xAI’s recent funding success and plans for infrastructure expansion signify a promising future for the company. With strong backing from influential investors and strategic partners, xAI is poised to make significant advancements in AI technology. Elon Musk’s vision for the company, coupled with robust technical support, sets the stage for xAI to become a major player in the AI industry.