Elon Musk’s AI company xAi has managed to raise $6 billion in funding. This round of funding will increase the valuation of the company to $50 billion, more than doubling the valuation of $24 billion in its last round of funding in May. 

As per inside sources, the funding is coming in two parts. $5 billion will be coming from sovereign funds from the Middle East and the remaining $1 billion will be coming from other investors. 

Some of these investors are new and the rest are simply renewing their funding. All the deals are expected to close by next week.

As per sources close to the company, this money will be used to purchase 100,000 Nvidia chips. These chips will power the new Memphis supercomputer which in turn will power Tesla’s upcoming line of Full Self Driving cars.

The Trajectory of xAI’s Journey 

xAI was launched in July 2023 and in just a little over a year, it has made significant progress.

It started with the release of an AI-powered chatbot called GrokAI to compete with leading industry players such as ChatGPT and Gemini. After its success, two newer versions – Grok AI 2 and GrokAI Mini were also released shortly after, with the added feature of image generation. 

Up until now, GrokAI has only been available to paid users. However, as per recent reports, the company is also testing a free version that will be available to all users. 

And now comes the biggest news – the xAI Colossus, the world’s largest AI supercomputer, received approval from the Tennessee Valley Authority in early November.

It will now get 150mw of power from the state’s grid (previously it was only getting 8mw), allowing it to train GrokAI’s family of large language models for efficiency. 

Such a huge power demand has naturally raised concerns from local activists. However, experts estimated that it actually requires at least 155mw to run the 100,000 GPUs that are powering the system. So Musk’s demand for 150 is actually quite conservative.