The global race for artificial intelligence has intensified after several investors raised US$ 6 billion to further develop and advance Elon Musk’s xAI.
- •Elon Musk founded xAI in July last year, joining the fray of multibillion tech companies that had onboarded the AI revolution.
- •The funding round was led by Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal.
- •xAI will compete with other fledgling AI projects pioneered by big tech companies such as Google, Meta, Amazon, Apple, and Microsoft.
Since its establishment, xAI has managed to create a chatbot called Grok that is available for premium users of X (formerly Twitter). The chatbot was meant to compete against ChatGPT, owned by OpenAI. Currently, Musk is suing OpenAI and its founder Sam Altman after he partnered with Microsoft thus overriding the initial intent of the company.
xAI will need the money to purchase expensive AI development hardware from companies such as Nvidia. This includes the Blackwell B200 AI graphics cards that cost US$ 40,000 per piece. To upgrade the Grok chatbot, Musk’s AI company would need about 100,000 chips for the supercomputer controlling the bot.
According to earlier filings from the Securities and Exchange Commission, xAI had initially intended to raise only US$1 billion. However, with companies such as Microsoft dousing US$ 13 billion to the market, prices surged and more money was needed if the emergent firm had to survive competition.
Moreover, as big tech companies look forward to outpacing each other in the development of AI, Africa’s ready talent may become the next frontier for this battle.
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