xAI Raises Whopping $6 Billion Funding to Challenge OpenAI's Dominance

xAI Raises Whopping $6 Billion Funding to Challenge OpenAI's Dominance

By Staff Writer, 31 May 2024

Elon Musk's artificial intelligence startup, xAI, has raised $6 billion in a series B funding round, with notable participation from Saudi billionaire Prince Alwaleed bin Talal and his investment firm, Kingdom Holding. The significant investment is aimed at positioning xAI as a formidable competitor to OpenAI.

The funding round also saw contributions from prominent investors such as Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, and Fidelity Management & Research Company. According to a statement from xAI, the raised capital will be used to launch the company’s initial products, enhance infrastructure, and accelerate the development of future technologies.

“The funds from the round will be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies,” the company said, adding that “multiple exciting technology updates and products” are forthcoming.

Prior to this funding round, xAI was valued at $18 billion, according to a post by Musk on X, the platform formerly known as Twitter, which he owns.

Kingdom Holding and Prince Alwaleed have a significant stake in X, having initially invested in 2011 and increased their shareholding in 2015. This new investment in xAI aligns with their strategy of backing innovative technology ventures.

Launched in July last year, xAI aims to meet the growing demand for generative AI and to challenge the market dominance of OpenAI, which has received around $13 billion in backing from Microsoft. xAI introduced its Grok-1 generative AI platform in November, followed by an improved version, Grok-1.5, in March.

Source: Aarti Nagraj / The National

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