Elon Musk’s xAI raises £4.78bn to boost research and development across its companies as annual revenue hits almost £79m

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

The funds will be used to accelerate training of its powerful AI model Grok 3 while improving technology at SpaceX and Tesla.

The Grok AI model will likely power more features on X, formerly Twitter, including search functionality and post analytics. xAI also supports Starlink’s customer support functions and is in discussions with Tesla about offering research and development services for a share of the electric vehicle company’s sales.

BlackRock and Nvidia are among 97 investors participating in the latest fundraising round

The SEC filing shows that 97 investors participated in xAI’s latest fundraising round. Investors were required to put up a minimum capital of £61,897 ($77,593).

Shortly thereafter, xAI announced 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 funding round brings the total capital raised since inception to £9.57 billion ($12 billion). The AI ​​company raised $6 billion earlier this year. According to a November CNBC According to a report, Musk’s company was seeking a valuation of 39.88 billion pounds ($50 billion), almost double its valuation six months ago.

Interestingly, only investors who had supported xAI in the spring fundraising round were allowed to participate in the latest round. Additionally, investors who backed Musk in the Twitter acquisition reportedly had the privilege of accessing up to 25% of xAI’s outstanding shares.

xAI annual revenue approaches £79m

Elon Musk introduced xAI in 2023 and launched the generative AI model Grok to compete with ChatGPT. He described Grok as “maximum truth-seeker” and relatively less biased.

The company recently launched an API that allows customers to integrate Grok with third-party apps, platforms and services. A standalone Grok iOS app was also released to compete with GenAI competitors such as OpenAI and Anthropic. Note that Musk was one of the founders of OpenAI, which he left in 2018 due to disagreements over where the company should go.

xAI trains next-generation Grok models at its Memphis data center, which houses 100,000 Nvidia graphics processing units (GPUs). Last month, the company secured 150 megawatts of additional power from the Memphis Regional Power Authority. In return, xAI promised to improve the city’s drinking water quality and feed discounted Tesla-made batteries into the power grid.

xAI’s developer- and consumer-focused services grew the company’s revenue to nearly 79.76 million pounds ($100 million) per year. xAI has reportedly informed shareholders that it expects to raise additional funds in 2025.

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