Elon Musk's xAI raises $20 bln funding

Elon Musk's artificial intelligence startup xAI has raised $20 billion in a new funding round, exceeding its initial $15 billion target. 

The company said it will use the funds to build computing infrastructure and speed up development of its AI products, including its next-generation Grok 5 model.

Investors in the round include Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, and the Qatar Investment Authority. Chipmaker Nvidia and Cisco Investments joined as strategic investors, with xAI stating their backing will help expand its computing capacity.

The funding announcement coincides with increased scrutiny of xAI's Grok chatbot. The platform has faced international criticism for allowing users to generate deepfakes, including those of minors. xAI has stated it takes action against illegal content on its platforms.

As per reports by Reuters and AFP, the substantial investment highlights continued strong demand for AI ventures despite concerns over market sustainability. xAI is rapidly expanding its data centre footprint in an effort to compete with leading AI models from companies like OpenAI and Alphabet. The company claims its services now reach approximately 600 million monthly active users.