xAI, the artificial intelligence company founded by Elon Musk, announced that it had successfully raised $6 billion in a Series C funding round. The announcement highlighted the involvement of major investors, including BlackRock, Andreessen Horowitz, Fidelity, MGX, Lightspeed, Morgan Stanley, QIA, OIA, Sequoia Capital, Vy Capital, Valor Equity Partners, AMD, and Nvidia, among others.
Among the participants, Saudi Arabia’s Kingdom Holding Company contributed approximately $400 million, as revealed in a public filing. The document also indicated that xAI’s valuation has surged to $45 billion—almost doubling since its last funding round. With this latest investment, the company’s total funding now stands at $12 billion, following a $6 billion round earlier in May.
Only existing investors from xAI’s previous funding round were eligible to participate this time. Furthermore, it has been reported that investors who supported Musk’s Twitter acquisition were given access to as much as 25% of the company shares.
In a statement, xAI revealed that it is training its most advanced AI model to date and is preparing to launch cutting-edge enterprise and consumer products. The funds raised will accelerate infrastructure development, product innovation, and research initiatives.
Founded last year, xAI debuted Grok, its generative artificial intelligence model, which powers several X features. Grok offers functionality to X’s free and premium users in selected regions. Known for its unconventional responses, Grok has been described by Musk as having a “rebellious streak,” able to handle “spicy” queries that other AI systems typically avoid. Despite its bold nature, Grok also steers clear of certain topics, and critics note evidence of political bias despite Musk’s claims of impartiality.
Grok’s presence on X has grown over the last 12 months. Initially limited to select users, it now generates images and summarizes content through integration with xAI’s image generation model, Aurora. Grok is expected to expand its capabilities, potentially improving X’s search tools, post analytics, and more. The addition of a “Grok button” has also enhanced users’ ability to explore trending topics.
xAI envisions leveraging data from Musk’s companies, including SpaceX and Tesla, to enhance technologies across sectors. Already, it supports SpaceX’s Starlink service and is in discussions with Tesla for further collaborations, though Tesla shareholders have raised concerns about resource diversion.
Rapid expansion has marked xAI’s growth, with its workforce surpassing 100 employees and its operations moving into OpenAI’s former headquarters in San Francisco. While the company plans to raise additional funding in 2025, it faces stiff competition as other AI labs secure massive investments, such as Anthropic’s $4 billion from Amazon and OpenAI’s $6.6 billion round, underscoring the fierce race in the AI industry.
Other companies like International Business Machines Corp. (NYSE: IBM) may not be grabbing headlines since they aren’t startups conducting funding rounds, but they are quietly ramping up their AI service development and addressing customer needs.
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