Elon Musk’s Al ambitions have reached new heights with ×Al, his artificial intelligence startup, securing a $5 billion funding round that catapulted its valuation to a staggering $50 billion.
This recent development underscores Musk’s unwavering commitment to pushing the boundaries of Al technology and solidifies ×Al’s position as a major player in the rapidly evolving Al landscape.
According to the Wall Street Journal, this latest financial investment, brings xAl’s total funding this year to $11 billion, with key backers including the Qatar Investment Authority, Andreessen Horowitz, Valor Equity Partners, and Sequoia Capital. This new valuation is more than double the company’s previous estimate.
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Recall that in May 2024, xAI raised $6 billion in series B funding, reaching a post-money valuation of $24 billion as investors bet big on on the company, intensifying the AI race. The company announced that the money will be used to take its first products to market, build advanced infrastructure and accelerate research and development of future technologies.
With the recent funds raised, XAl plans to use part of its new capital to acquire an additional 100,000 Nvidia chips to further develop its Al models, underscoring its ambition to lead in the artificial intelligence space. The $50 billion valuation notably surpasses the $44 billion Musk paid to acquire Twitter, now rebranded as X, in October 2022. Despite significant changes and innovations on the platform, including a monetization model for content creators, Fidelity recently slashed its valuation of X to $9.4 billion, a stark drop from Musk’s initial investment.
The meteoric rise of ×Al highlights the growing importance of artificial intelligence in transforming industries and Musk’s continued ability to attract substantial investor interest in cutting-edge technologies. Launched in July 2023, xAI was developed with a mission to understand the true nature of the universe.
“If it tried to understand the true nature of the universe, that’s actually the best thing that I can come up with from an Al safety standpoint. I think it is going to be pro-humanity from the standpoint that humanity is just much more interesting than not-humanity”, Musk said speaking on ×Al capability.
Also, the AI startup was established as Musk’s counter to OpenAi, the Al powerhouse he co-founded in 2015 with Sam Altman. Their split in 2019 has since escalated into a bitter rivalry, marked by public disputes and legal challenges. ×Al’s aspires to quickly dominate the Al market, where it faces direct competition from OpenAl maker of popular chatbot ChatGPT. The company’s first major product, the Grok chatbot, released last
November, is a testament to its rapid progress. Notably, Musk who has been a strong advocate for safer Al, disclosed via a space on X that rather than explicitly programming morality into its Al, ×Al will seek to create a “maximally curious”.
Recall that Musk has warned regularly that unrestrained development of AI broadly, computer systems performing tasks that typically require human intelligence, could be catastrophic for humanity. Last year, he was one of more than 30,000 signatories to a letter calling for a pause in work on powertul Al technology.
As ×Al continues its rapid ascent, the company’s valuation reflects not only the potential of artificial intelligence but also Musk’s enduring influence in shaping the future of technology.