Elon Musk’s artificial intelligence venture, xAI, has successfully raised a whopping $6 billion, as revealed in a recent filing with the U.S. Securities and Exchange Commission on Thursday.

The investors, who chose to stay anonymous, contributed at least $77,593 each, according to the filing. Subsequently, xAI disclosed that the investors included prominent names like Andreessen Horowitz, Blackrock, Fidelity, Kingdom Holdings, Lightspeed, MGX, Morgan Stanley, Nvidia, AMD, and several others.

This fresh inflow of capital boosts xAI’s total funds to $12 billion, augmenting the $6 billion round raised earlier this year. CNBC reported earlier in November that xAI had set its sights on a massive $50 billion valuation — a two-fold increase from its valuation just six months ago.

As noted by the Financial Times, only those investors who had participated in xAI’s previous fundraising round were allowed to partake in this one. Interestingly, those investors who had a hand in financing Musk’s acquisition of Twitter were granted access to up to 25% of xAI’s shares.

Accelerating AI Development

Musk launched xAI last year and soon after, the company introduced Grok, its groundbreaking generative AI model. Grok now powers numerous features on X, previously known as Twitter, including a chatbot accessible to X Premium subscribers and free users in certain regions.

Grok, as described by Musk, has “a rebellious streak” — it doesn’t shy away from responding to “spicy questions” that other AI systems would typically reject. For instance, if asked to use profanity, Grok would readily comply, generating language that you wouldn’t typically hear from ChatGPT.

Musk has criticized ChatGPT and similar AI systems for being overly “woke” and “politically correct,” even though Grok itself refrains from crossing specific boundaries and discussing political subjects. Musk has also referred to Grok as “maximally truth-seeking” and less biased than its competitors, although evidence suggests that Grok might have a slight left-leaning bias.

Over the past year, Grok has become deeply integrated with X, the social network previously known as Twitter. Initially, Grok was exclusively available to X users and developers proficient enough to run the “open source” edition.

Thanks to a partnership with the open image generator Flux, Grok can now generate images on X (controversially, without any restrictions). The model can also analyze images, and summarize news and trending events (albeit imperfectly).

Reports suggest that Grok might take up more functions on X in the future, including enhancing X’s search capabilities, account bios, post analytics, and reply settings.

xAI is racing against formidable competitors like OpenAI and Anthropic in the generative AI race. The company recently launched an API in October, enabling customers to incorporate Grok into their third-party apps, platforms, and services. In addition, a standalone Grok iOS app has just been launched to a test audience.

Despite the competition, Musk maintains that the battle hasn’t been fair.

Musk’s legal team has filed a lawsuit against OpenAI and Microsoft, accusing them of “actively trying to eliminate competitors” like xAI by “extracting promises from investors not to fund them.” The attorneys also claim that OpenAI gains an unfair advantage from Microsoft’s infrastructure and expertise in what they describe as a “de facto merger.”

Musk, who was one of the original founders of OpenAI, left the company in 2018 following disagreements over its direction. He has previously argued in lawsuits that OpenAI profited from his early involvement yet failed to uphold its nonprofit pledge to make the fruits of its AI research available to all.

The xAI Ecosystem

xAI envisions a future where its models are trained on data from Musk’s multiple ventures, including Tesla and SpaceX. This data would then be used to enhance technology across these companies. As reported by The Wall Street Journal, xAI is already powering customer support features for SpaceX’s Starlink internet service, and talks are underway with Tesla to provide R&D in exchange for a portion of the carmaker’s revenue.

However, this plan has met with resistance from Tesla shareholders. Several have sued Musk over his decision to start xAI, arguing that Musk has diverted both talent and resources from Tesla to what they perceive as a competing venture.

Regardless of the opposition, the deals and xAI’s developer and consumer-facing products have driven xAI’s revenue to around $100 million a year. For comparison, Anthropic is reportedly on track to generate $1 billion in revenue this year, while OpenAI aims to hit $4 billion by the end of 2024.

In conclusion, xAI is fast emerging as a major player in the field of artificial intelligence. With its rapid growth and ambitious plans, the company is set to play a key role in the future of AI technology.

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