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Musk’s xAI, billed as an ‘OpenAI rival,’ raises $20bn in Series E

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Summary

  • xAI said it secured $20bn in its Series E round and will deploy the funds to expand AI data centers and train AI models.
  • The round included participation from the Qatar Investment Authority and Nvidia, and the industry estimates xAI’s valuation at around $230bn.
  • As the global AI capital race moves into a second round, OpenAI and Anthropic are also continuing large-scale funding, having raised $41bn and $13bn, respectively.

$5bn more than planned

“Round 2 of the AI investment war begins”

Photo=Shutterstock
Photo=Shutterstock

Elon Musk-led artificial intelligence (AI) company xAI has raised $20bn (about 26 trillion won), becoming the first major AI firm this year to announce a large-scale funding round. The capital will be used to expand data centers and train AI models. After global AI companies raised record amounts last year, this year is expected to see intensifying competition to secure funding, with listings by OpenAI and Anthropic anticipated.

xAI said in a blog post on the 6th (local time) that it secured $20bn in its Series E round—$5bn more than its original target. The Qatar Investment Authority and others participated, and Nvidia and others joined as strategic investors.

xAI said, “With this funding, we will build world-class infrastructure to accelerate AI development for billions of users and support research that advances our core mission of ‘understanding the universe.’” Here, “understanding the universe” refers to its truth-seeking AI philosophy. xAI is developing its next-generation generative AI model “Grok 5” and is considering expanding into gaming and robotics.

As part of its AI infrastructure buildout, xAI is expanding the “Colossus” supercomputer complex in Tennessee, US. Colossus 1 is already in operation, and construction of “Colossus 2” is under way. Colossus 1 and 2 will provide computing resources equivalent to about 1 million Nvidia H100 GPUs. The company recently purchased a third site in Mississippi for an additional data center.

The industry views the deal as a sign that the AI capital race has entered its second round. Last year, global AI companies raised a record $150bn or more. OpenAI, valued at $500bn, recently wrapped up a $41bn fundraise, and reports say it is targeting up to $100bn in new funding in the first quarter of this year.

Anthropic raised $13bn in September last year, taking its valuation to $183bn. xAI did not disclose its valuation on the day, but the industry estimates it at around $230bn.

Reporter Choi Young-chong youngchoi@hankyung.com

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