Elon Musk’s Xai is raising $10 billion from investors in a round that values the artificial intelligence startup at $200 billion, sources told CNBC’s David Faber.
This is the latest example of a surge in valuations for companies developing basic AI models. Earlier this month, humanity raised $13 billion at a valuation of $183 billion. Openai, the largest company in the industry, held a secondary stock sale valued at $500 billion.
According to Faber, Musk was thought to be valued at around $150 billion, and the fundraiser will take place a few weeks after Musk raised $10 billion in debt and stock. Last December, Xai raised $6 billion to fund AI development.
However, Xai is plagued by controversy due to the incident in which Grok Chatbot praised Adolf Hitler, attacked the Jewish people, and Grok responded to user questions with unrelated comments about “white genocide” and South Africa.
It is widely believed that Grok is lagging behind Anthropic’s Claude and Openai’s GPT model in terms of capabilities and user count.
In March, Musk announced that Xai had merged with his social network, X. This valued the AI company at $80 billion and the social media company at $33 billion. Musk acquired Twitter in 2022 for around $44 billion and later changed its name to X.
Mask said in May that he wanted to buy 1 million AI chips, Faber said. Much of the proceeds from this funding round will be devoted to building data centers filled with NVIDIA and AMD Graphics Processing Units (GPUs) that will hire the necessary and expensive talent to develop the next generation of AI. The company is currently building a large cluster of AI computers in Memphis, Tennessee.
In particular, Tesla The board asked investors to approve a new pay package for masks earlier this month. Musk says he does not support the merger between Xai and Tesla.
Watch: Openai hires former Xai CFO
