Elon Musk's xAI Raises £4.78B to Ramp up R&D Across His Firms as Revenues Near £79M Annually

A recent US Securities and Exchange Commission (SEC) filing revealed that Elon Musk's AI company, xAI, raised £4.78 billion ($6 billion) from 97 investors in exchange for equity.

The funds will be used to expedite training its powerful AI model, Grok 3, alongside enhancing technology across SpaceX and Tesla.

The Grok AI model will likely support more functions on X, formerly Twitter, including search capabilities and post analytics. xAI also powers Starlink's customer support features and is discussing with Tesla about offering R&D services for a share of the EV company's revenue.

BlackRock And Nvidia Among 97 Investors Partaking In The Latest Fundraising Round

The SEC filing highlighted that 97 investors participated in xAI's latest fundraising round. The investors were required to inject a minimum capital of £61,897 ($77,593).

Soon after, xAI disclosed the names of several investors, including BlackRock, Morgan Stanley, Nvidia, AMD, Sequoia Capital, Fidelity Management & Research Company, MGX, Vy Capital, Lightspeed, Valor Equity Partners, and Kingdom Holdings.

xAI's latest fundraising round brings its total capital raised since inception to £9.57 billion ($12 billion). The AI company raised $6 billion during spring this year. According to a November CNBC report, Musk's company was eyeing a £39.88 billion ($50 billion) valuation, almost double compared to six months earlier.

Interestingly, only investors who supported xAI in the Spring fundraising round were allowed to participate in the latest round. Furthermore, investors who assisted Musk in acquiring Twitter reportedly had the privilege of accessing up to 25% of xAI's outstanding shares.

xAI Annual Revenues Inches Towards £79M

Elon Musk incorporated xAI in 2023 and launched the generative AI model Grok to compete with ChatGPT. He described Grok as 'maximally truth-seeking' and relatively less biased.

The firm recently rolled out an API to let customers integrate Grok into third-party apps, platforms, and services. It also released a standalone Grok iOS app to catch up with GenAI competitors like OpenAI and Anthropic. Note that Musk was one of the founders of OpenAI, which he left in 2018 over disagreements about where the company was headed.

xAI is training next-gen Grok models at its Memphis data centre, which hosts 100,000 Nvidia graphics processing units (GPU). Last month, the company secured 150 megawatts of extra power from Memphis' regional power authority. In turn, xAI promised to improve the city's drinking water quality and offer discounted Tesla-manufactured batteries to the power grid.

xAI's developer and consumer-focused services drove company revenue to almost £79.76 million ($100 million) annually. xAI has reportedly informed shareholders it will likely raise more funding in 2025.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.