Elon Musk’s artificial intelligence company, xAI, reportedly reached a valuation of $50 billion just 16 months after its founding in July 2023. It’s now worth more than what the billionaire paid for Twitter. OpenAI, probably the most recognized name in AI, was last valued at $157 billion and took nine years to reach the same milestone.
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According to Business Insider, xAI is gaining traction in the competitive AI sector and is now valued higher than other AI startups such as Anthropic (valued at $19 billion) and Perplexity (at $2.8 billion).
xAI’s journey has been marked by major milestones, including raising $5 billion in its latest funding round to purchase 100,000 Nvidia chips. These chips will power the Memphis supercomputer, a facility designed to enhance the company’s AI capabilities and support Tesla’s Full Self-Driving (FSD) technology. According to WSJ and other sources, the financing included $5 billion from Valor Equity Partners, Sequoia Capital, Andreessen Horowitz and Qatar Investment Authority.
The Memphis supercomputer, which is still awaiting final approval, is a… important part of xAI’s strategy. It was built in less time than is usual for these types of projects and is located on a former production site. In a recent podcast, Nvidia CEO Jensen Huang said xAI completed building the supercluster in 19 days, although the process typically takes more than a year.
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“To put it in perspective, 100,000 GPUs are by far the fastest supercomputer in the world as one cluster. A supercomputer you would build would normally take three years to plan,” Huang said, highlighting the role of xAI engineering and infrastructure teams and thanks them for the rapid implementation of the system.
In particular, xAI has developed the AI chatbot Grok, inspired by the science fiction novel The Hitchhiker’s Guide to the Galaxy. Grok is positioned as a competitor to OpenAI’s ChatGPT, Google’s Gemini and Anthropic’s Claude. The chatbot uses xAI’s own major language model, Grok-2, and is a notable part of the company’s portfolio.