Report: Elon Musk’s xAI Raises $5 Billion and Doubles Valuation

Elon Musk’s artificial intelligence (AI) startup xAI reportedly raised $5 billion in a funding round, valuing the company at $50 billion.

The new financing brings the total amount raised by xAI this year to $11 billion, the Wall Street Journal (WSJ) reported Wednesday (Nov. 20).

The funding round also more than doubled xAI’s valuation, which was gauged at $24 billion when the company raised $6 billion in the spring, according to the report.

The company plans to use the new funds to add another 100,000 Nvidia chips for training its AI models, per the report.

It was reported Oct. 29 that xAI aimed to raise “several billion dollars” in a funding round that would value it around $40 billion.

In September, the company launched its Colossus 100k H100 training cluster, with Musk saying in a post on X that it is “the most powerful AI training system in the world. Moreover, it will double in size to 200k (50k H200s) in a few months.”

The H200 is an Nvidia GPU designed to accelerate generative AI and large language models.

In a repost of Musk’s post, Nvidia Data Center said on X that xAI’s Colossus is “the world’s largest GPU #supercomputer” and it came online “in record time.”

It was reported Oct. 10 that AI startups raised $11.8 billion in the third quarter and $53 billion year to date.

“The AI sector remains a long-term growth opportunity for VC investors despite the volatility seen in recent months,” Stocklytics wrote at the time. “Although they are being more selective about which AI startups to back, the overall interest remained strong, and Crunchbase data proves this.”

Venture capital firm Menlo Ventures said Wednesday that enterprise spending on generative AI increased sixfold this year — from $2.3 billion in 2023 to $13.8 billion in 2024 — as businesses began implementing the technology after first experimenting with it.

“2024 marks the year that generative AI became a mission-critical imperative for enterprise,” Menlo Ventures Partner Joff Redfern said in a press release. “The numbers tell a dramatic story of organizations moving beyond pilots to embedding AI at the core of their business strategies.”