Elon Musk’s artificial intelligence startup Xai is pursuing $10 billion in funding at a $200 billion valuation, CNBC reported on September 19th.
Sources said the funding revenue will primarily support the construction of data centers filled with NVIDIA and AMD graphics processing units needed for next-generation AI development.
The company is currently building a large AI computing cluster in Memphis, Tennessee to build the computing power needed to train advanced models.
Xai’s latest rumoured fundraiser was completed with a valuation of around $150 billion, which was completed a few weeks ago, following a recent $10 billion debt and equity round. The company previously raised $6 billion in December to fund AI development, demonstrating rapid capital consumption typical of large-scale AI businesses.
ai mega-rounds
The funding represents the latest surge in AI companies’ ratings following a similar mega-round across the sector. Humanity raised $13 billion earlier this month at a valuation of $183 billion, and Openai completed a secondary stock sale valued the company at $500 billion.
The pursuit of fundraising arises amidst the persistent issues with Xai’s GROK chatbot.
The incident includes a chatbot that praises Adolf Hitler, attacks Jews and provides unrelated comments about “white genocide” and South Africa in response to user questions.
According to the report, Grok is lagging behind the capabilities and user recruitment model of industry leaders Anthropic.
Musk announced in March that Xai had merged with social media platform X. Xa merged through all-stock transactions valued Xai at $8 billion and X at $33 billion.
Tesla’s board recently requested investor approval for a new mask compensation package worth $975 billion.
However, Musk said he opposed the fusion of Xai and Tesla, and maintained a segregation between his automobile and AI venture despite potential synergies.
The funding round highlights the capital-intensive nature of the AI industry as companies compete for talent, computational resources and market positions in the rapidly evolving artificial intelligence landscape.
