AI firms are seeing a growing number of investments as their quest for further expansion escalates. While OpenAI and Meta are two leading AI firms in terms of investment received, Elon Musk’s xAI appears to be slowly catching up.
Recently, xAI raised approximately $20 billion in a Series E round, which exceeded its $15 billion target. The investment earned is significant for the AI platform linked to X (formerly Twitter), as it provides resources for scaling AI capabilities, integrations with social media platforms, and essentially competing with other competitors.
xAI raises $20 billion, tightens competition with OpenAI
Elon Musk is not just a business magnate; his intense passion for building top-notch technology through unique innovation reflects in his various business ventures, such as Starlink, a satellite network, and SpaceX, the aerospace company founded by him.
In 2022, when Elon Musk took over Twitter and rebranded it to X, the call for AI integration had already started, and the very next year he launched xAI. The AI-integrated platform has accumulated nearly $42 billion in total funding to date, as reported by The New York Times.
The current $20 billion fund in Series E originates from key players such as NVIDIA, Fidelity, Qatar Investment Authority, Cisco Investments, StepStone Group, Valor Equity Partners, and others.
The huge investment marks a milestone for xAI to shine brighter with more user-friendly AI services. However, its active competition in both fundraising and AI service providers continues with OpenAI, Scale AI, Anthropic, and Databricks.
AI investment growth could spiral up, but threat awaits
According to Derek Thompson’s newsletter, the current AI investment spike relates to previous surges, which can continue and eventually crash, akin to broadband in earlier times.
Meanwhile, some industry experts like Jennifer Li, General Partner at Andreessen Horowitz, a venture capital firm, emphasized that multiple fundraising rounds by AI startups can pose a risk as they focus more on getting funds and less on providing services.
However, in the case of xAI, the above statement may not have an impact. The AI platform was started in 2023, but it has strong backup firms like X and Elon Musk’s other tech firms.
In a broader aspect, firms investing in the AI sector are increasingly experiencing growth in innovation, work, and product development, according to Brookings, a Washington-based think tank. To decode it, the firms invested in the current xAI fundraising and other AI platforms are expected to see the growth mentioned before.
