AI venture capital is booming! Musk's xAI raises $6 billion; Big players like NVIDIA Corporation (NVDA.US) have joined.

According to regulatory filings, Elon Musk's artificial intelligence company xAI has raised $6 billion. This round of funding involved 97 investors, with a minimum investment amount of $77,593, but the filings did not disclose the specific identities of the investors. xAI recently announced that investors include Andreessen Horowitz, BlackRock, Inc., Fidelity, Morgan Stanley, Sequoia Capital, NVIDIA Corporation (NVDA.US), and AMD (AMD.US) among others. AI venture capital frenzy This funding round brings xAI's total funding to $12 billion. Reports in November stated that xAI's valuation target is $50 billion, double from six months ago. Reportedly, only investors who supported xAI in the previous funding round were allowed to participate in this round. It was reported that investors providing funds for Musk's acquisition of Twitter could potentially receive up to 25% stake in xAI. It has been reported that xAI has informed investors of plans to raise more funds next year. This is not the only artificial intelligence lab raising significant amounts of capital. Anthropic recently received $4 billion from Amazon.com, Inc., bringing its total funding to $13.7 billion, while OpenAI raised $6.6 billion in October, increasing its total funding to $17.9 billion. According to PitchBook data, large deals like OpenAI and Anthropic have driven AI venture capital activity to reach $31 billion in the third quarter of 2024, with over 2,000 transactions. Musk's AI ambitions Musk founded xAI last year. Shortly after, the company released its flagship generative artificial intelligence model Grok, which currently supports many features on X, including the Siasun Robot & Automation chat available to X Premium subscribers and some free users in certain regions. Musk has mocked ChatGPT and other AI systems for being too "woke" and "politically correct," although Grok also avoids political topics. He also claimed that Grok "maximizes the pursuit of truth" and is less biased than other competing models, although there is evidence that Grok leans left. xAI is accelerating to catch up with powerful competitors like OpenAI and Anthropic. The company launched an API in October, allowing customers to integrate Grok into third-party applications, platforms, and services. It has just released an independent Grok iOS app to test users. Musk often states that X's data gives xAI an advantage over competitors. Last month, X changed its privacy policy, allowing third parties, including xAI, to use X's posts for model training. It is worth noting that Musk is one of the founders of OpenAI, but due to differences in direction, he left the company in 2018. Musk claimed in a lawsuit against OpenAI that the company benefited from his early contributions but violated its non-profit commitment of making AI research results equally accessible to everyone. xAI also outlined its vision, stating that its models will be trained using data from Musk's various companies (including Tesla, Inc. and SpaceX), and then these models can improve the technology of these companies. However, Tesla, Inc. shareholders oppose these plans. Some have filed lawsuits against Musk for diverting talent and resources from Tesla, Inc. to essentially competing companies. Nevertheless, these deals have boosted xAI's revenue to approximately $100 million annually. In comparison, Anthropic is expected to reach $1 billion in revenue this year, with OpenAI aiming for $4 billion by the end of 2024.