Musk Strikes Again: xAI Seeks $6 Billion in Funding, Likely for 100,000 NVIDIA Chips

Elon Musk, one of the world’s wealthiest individuals, is making new moves in the AI sector.

According to reports, Musk’s artificial intelligence company, xAI, is raising up to $6 billion at a valuation of $50 billion.

Sources indicate that the funding round is expected to close early next week, with $5 billion likely coming from Middle Eastern sovereign funds and $1 billion from other investors, some of whom may be reinvesting.

The funds are expected to be used for purchasing 100,000 NVIDIA chips to build xAI’s data center in Memphis, Tennessee, which is being touted as the world’s largest. The data center will not only train xAI’s AI chatbot, Grok, but also support Tesla’s Full Self-Driving (FSD) program.

Just three weeks ago, Musk posted on social media that xAI would “soon” have a super training cluster containing 200,000 NVIDIA H100 and H200 GPU chips. This cluster, named Colossus, already includes over 100,000 NVIDIA H100 GPUs and has been described by NVIDIA as “the world’s largest GPU supercomputer brought online in record time.”

At the time, it was reported that xAI was negotiating a new multi-billion-dollar funding round targeting a $40 billion valuation. Earlier this spring, the company completed a $6 billion round at a valuation of $24 billion. This indicates that in just a few weeks, xAI’s valuation has surged by approximately $10 billion.

Now that Donald Trump has been elected President, Musk, a member of Trump’s inner circle, has recently begun collaborating with the new administration to explore broader policies in AI and technology.

According to Trump’s campaign platform, he plans to revoke President Biden’s executive orders on AI, claiming they “hinder AI innovation and impose radical left-wing ideology on its development.” In contrast, Trump asserts that the Republican Party supports AI development grounded in “free speech and human prosperity.”