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xAI (private) is Elon Musk’s new artificial intelligence startup.
Last year the company launched Grok as an AI chatbot available on Twitter / X.
Elon announced a major round of funding for xAI this week.
The startup will raise $6 billion from investors.
Investors include high profile venture firms including Andreesen Horowitz and Sequoia. Other investors include the Saudi Arabian royal family and Cathie Wood’s new venture firm.
xAI is now worth $24 billion.
Musk plans to use the funds to build an AI Gigafactory.
The AI Gigafactory will use 100,000 processors from Nvidia (NASDAQ: NVDA). And Musk claims that it’ll be 4x larger than the supercomputers used by Meta Platforms and others.
The new datacenter will launch by fall of 2025.
Shares of Nvidia rose 8% on the news – hitting a new all-time high.
Nvidia is expected to be the biggest beneficiary from xAI.
That’s because the vast majority of xAI’s cash infusion will be used to purchase Nvidia’s H100 chips and the new Blackwell B200 chips.
The big take away is…
Billions of dollars are flowing into AI startups.
There’s a mad rush to buy powerful chips and new datacenters to power the AI revolution.
This unstoppable trend will not end anytime soon.
So, why is Elon Musk going “all in” on artificial intelligence? And what exactly is his plan for Tesla and xAI?
Ian