Elon Musk’s xAI raises $6B to scale up GPU infrastructure – SiliconANGLE

Elon Musk’s artificial intelligence startup xAI Corp. announced today that it has raised $6 billion in new equity financing as the company seeks to expand its supercomputer facility even more to house at least 1 million graphics processing units.

Reports that xAI was seeking to raise additional funding emerged in October, with reports suggesting that the company was seeking to raise “several billion dollars” on a $40 billion valuation. The company had previously raised $6 billion on a $24 billion valuation in May.

Another report on Nov. 15 pegged the amount xAI was seeking to raise at $6 billion at a valuation of $50 billion. The same reports suggest that the bulk of the capital, $5 billion, would come from sovereign funds in the Middle East, with the rest coming from other investors. Other reports at the time suggested that the valuation of the deal would be $45 billion.

Exactly what the final valuation of the deal was is not yet clear.

Launched by Musk in 2023, xAI is aiming to develop an advanced artificial general intelligence system that surpasses current AI capabilities. The company says it’s focused on building a safe, robust AGI that is driven by Musk’s vision of creating beneficial and human-aligned intelligence.

It released its first large language model, Grok-1, late in 2023 before releasing Grok-1.5 in April and Grok-2 in August. The latest Grok-2 model can generate text, troubleshoot code, perform related tasks and analyze user-provided images.

Core to the company’s vision is building computing processing power. In September, xAI announced that it had completed the assembly of an artificial intelligence training system that features 100,000 graphics cards. Called “Colossus,” the system is claimed by Musk to be the “most powerful AI training system in the world” and runs on 100,000 Nvidia Corp. H100 graphics cards.

While a layperson or informed observer might think that 100,000 H100 GPUs would be ample, Musk has other ideas, having first announced plans in September to expand Colossus with 100,000 more chips, of which half are expected to be H200s, a more advanced GPU than the H100 GPUs currently used by Colossus.

Forward to only yesterday and it was reported that xAI is now aiming to expand Colossus, which is located in Memphis, Tennessee, to at least 1 million GPUs. Exactly how xAI intends to get to 1 million is not clear.

Nvidia H100s retail for about $25,000 each, and H200s are more expensive again. Though xAI would likely get a decent bulk discount, 800,000 H100s or 200s at $25,000 a pop is $20 billion, more than xAI has raised in funding.

The new funding raised by xAI comes after industry leader OpenAI raised $6.6 billion on a $157 billion valuation on Oct. 2, while another large player in AI, Anthropic PBC, was reportedly in talks to raise new funding at a $40 billion valuation in September.

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