Elon Musk Secures Whopping $10B for xAI—Investors Double Down on AI’s Next Big Bet
Elon Musk just pulled off a $10 billion power move—and Silicon Valley's sharks are circling.
The AI Gold Rush Gets Muskier
Fresh capital floods xAI as lenders and investors place their chips on Musk's latest moonshot. Because nothing says 'sure thing' like betting billions on artificial intelligence before regulators even agree what AI is.
Show Me the Money
The funding round reads like a who's-who of finance chasing the next hype cycle—VCs, private equity, and probably that one crypto bro who YOLO'd his Bitcoin profits. (Smart money? Or just money that got lucky in 2021?)
One thing's clear: When Musk talks, Wall Street opens its wallet—even if the project smells suspiciously like vaporware wrapped in a Twitter thread.
Grok gets funding boost after GPU facility revealed in Memphis
In May, Elon told CNBC that xAI had installed 200,000 GPUs at a supercomputing facility called Colossus, located in Memphis, Tennessee. The site handles training for all of xAI’s models. Elon also said that xAI is now preparing to build a new facility with 1 million GPUs just outside Memphis. He confirmed the chips are being sourced from Nvidia and AMD, the two dominant players in AI hardware.
Morgan Stanley said that this $10 billion injection will support “one of the world’s largest data centers” and help push development on xAI’s flagship Grok platform. That includes continued training of new models. Grok 3, the latest version, was released in February.
In March, xAI acquired X in a deal that valued the platform at $33 billion and placed xAI’s valuation at $80 billion. It’s not yet clear if this most recent funding round has affected that figure. Just last year, xAI raised $6 billion at a $50 billion valuation, according to CNBC.
Elon’s rivalry with OpenAI and Anthropic intensifies
This cash lands at a time when the U.S. AI scene is locked in a funding war. OpenAI, which Elon helped found, closed a $40 billion raise in March that brought its valuation to $300 billion.
Its investors include Microsoft and SoftBank. Meanwhile, Anthropic, which makes the Claude chatbot and is backed by Amazon, hit a $61.5 billion valuation this year and added a $2.5 billion revolving credit line in May.
Elon has been vocal about his disagreements with OpenAI CEO Sam Altman. He’s accused Altman of turning OpenAI into a money-driven company and betraying its nonprofit beginnings. In February, Elon led a group of investors in a $97.4 billion bid to buy OpenAI outright. That bid was rejected.
xAI’s Grok is already active inside X, and Elon’s vision is to keep integrating it across all layers of the platform. But the chatbot has drawn heat. Earlier this year, Grok gave users bizarre responses tied to conspiracy theories like “white genocide” and political issues in South Africa. Elon hasn’t responded to the backlash but continues to promote Grok as a free-thinking alternative.
With $10 billion more in the bank and one of the largest GPU Stacks in the country, xAI now has the money to compete head-on. What Elon builds next is up to him—but it will definitely be loud.
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