Hey, everybody. Welcome back to the Elon Musk Podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla X, The Boring Company and Neuralink. I'm your host, Will Walden. Elon Musk's AI company XAI is set to raise $6 billion in his latest funding round. Now, this financial boost is aimed at advancing research and development amid strong competition in the AI sector, particularly facing Open AI, which Musk was a Co founder of but left years later.
Now, investors participating in the Series B funding round include prominent venture capital firms such as Anderson Horowitz, Sequoia Capital, Valor Equity Partners, VI Capital, and Fidelity Management and Research. Additionally, Saudi Prince Alba, Lead Bintalal and Kingdom Holding are among the backers as announced on XA is website and according to Elon, XA is valuation before this funding
round was $18 billion. This new infusion of 6 billion will elevate the startups evaluation to $24 billion. The funds are intended to help XAI bring its initial products to market, construct advanced infrastructure, and speed up the development of future technologies. Now, this funding marks a significant step in the escalating AI competition, where leading startups have been raising substantial amounts to support the computational demands required for training large language models.
Now, these models form the backbone of generative AI tech such as Open AI. Is ChatGPT. Now? Open AI, who's the creator of ChatGPT, has secured $13 billion in funding for Microsoft. Another competitor, Anthropic, has raised over $6 billion. In this context, Musk's X AI is attempting to catch up, having been publicly launched in July of the previous year. But some investors have expressed skepticism about XAIS ability to compete given its late start.
And despite these concerns, X AI launched his chatbot Grok in November, making it accessible to subscriber on Musk's social media platform X. The company introduced its latest AI model, Grok 1.5 learned. The company introduced its latest AI model, Grok 1.5, earlier this year, and Musk originally Co founded Open AI as a nonprofit research lab in 2015 with Sam Altman, who currently serves as Open AICEO. However, Musk left the company following a dispute over control.
Recently, tensions resurfaced when Musk and Open AI and Altman accusing them of deviating from Open AI's initial mission for
profit motives. Since its inception, XA has been closely integrated with X. The AI startup benefits from exclusive access to X's vast repository of post for training its models, and additionally, X AI employees have occasionally operated from Twitter's long standing headquarters in downtown San Francisco. Now, Elon Musk hinted at more announcements in the coming weeks on X following the
fundraising revelation. And this development positions X. AI as a significant player in need to compete with established AI firms like Open AI and others in the AI landscape. Now, the new funds are entirely fresh capital as confirmed by Musk to Axios. There's no indication that these are shares from Musk's acquisition of Twitter. Despite the overlap of investors, it remains unclear if the original backers of Twitter received additional equity in X AI.
In addition to Anderson, Horowitz and Sequoia Capital, other notable investors in the Series B round include Valor Equity VI Capital, Prince Alwaleed bin Talal in Kingdom Holding. It's a diverse group and there's broad interest in XA is potential, and there's potential to make a lot of money now. XAI has not disclosed specific
plans for the new funding. However, recent reports from The Information suggest that the company aims to build a massive new supercomputer, referred to as the Gigafactory of Compute, possibly in collaboration with Oracle. And the potential supercomputer, as reported, would significantly exceed the capacity of existing GPU clusters. The project would involve Nvidia's high demand H 100 graphics processing units, which are essential for data center
operations and AI development. Now, going back to Grok, the Grok 2 model required approximately 20,000 NVIDIA H100 GPU's for training, according to Elon. Future models such as Grok 3 will necessitate even more, with estimates suggesting up to 100,000 NVIDIA H100 chips now. Musk's establishment of X AI last year was for a creation of a formidable competitor to Microsoft backed Open AI and
Google's AI endeavors. His departure from Open AI and subsequent legal actions show that there's ongoing tensions within the AI research community. And there's a battle going on, and it's great for all of us because we get better products out of it. Now. Bringing AI products to market is complex, even for leading tech firms and even for Elon Musk. It takes a lot of money and a lot of time and a lot of very talented people to do this.
Now, Google's recent introduction of an AI generated search tool faced criticism for delivering inaccurate information. And this shows that it's very difficult to get these things right. Investment in AI has surged. It's sort of likethe.com bubble from earlier, but I don't think it's going to be a bubble. It is not financial advice, by the way, that is driven by the potential for these technologies to transform various aspects of our lives, make life a lot easier and work a lot easier
too. And major companies like Microsoft and Amazon have made significant investments in AI firms, billions of dollars. And there's potential for transformative technologies here. And as Open AI and XAI continue to compete, XAI is getting more funding, billions of dollars is poised to advance his technological capabilities and market presence within the next
six months. The new developments and further announcements from Musk will shape the trajectory of XAI and also their competitors in the coming years. Hey, thank you so much for listening today. I really do appreciate your support. If you could take a second and hit the subscribe or the follow button on whatever podcast platform that you're listening on right now, I greatly appreciate it. It helps out the show tremendously and you'll never
miss an episode. And each episode is about 10 minutes or less to get you caught up quickly. And please, if you want to support the show even more, go to patreon.com/stage Zero and please take care of yourselves and each other and I'll see you tomorrow.