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Elon Musk’s startup xAI raises $6B in new funding round to challenge Grok rival ChatGPT

Elon Musk is escalating the artificial intelligence arms race against his former colleagues at OpenAI by amassing cash for his own AI startup.

The Tesla mogul’s firm xAI — which powers the snarky Grok chatbot — announced on Sunday that it raised $6 billion in a fresh round of fundraising — soliciting investments from venture capital giants such as Andreessen Horowitz and Sequoia Capital, as well as Saudi Prince al-Waleed bin Talal.

The firm had a pre-money valuation of $18 billion, Musk said on X, meaning the latest round will push the startup’s valuation to $24 billion.

Musk, who was one of the co-founders of OpenAI when it was a nonprofit but then left after losing a power struggle with management, launched xAI less than a year ago.

Earlier this month, The Post reported that xAI’s valuation was expected to eclipse $20 billion due to surging demand from venture capitalists.

The money will be used to take xAI’s first products to market, build advanced infrastructure and accelerate research and development of future technologies, xAI said.

“There will be more to announce in the coming weeks,” Musk said in another X post, in response to the announcement of the funding.

Microsoft-backed OpenAI saw its valuation rise to some $80 billion after the introduction of its AI-powered bot ChatGPT in late 2022.

In March of last year, Musk was one of thousands of tech luminaries who signed onto a letter urging a pause in AI research due to potential risks to humanity.

Musk has also criticized OpenAI for abandoning its nonprofit status. Last July, he launched xAI to challenge OpenAI.

The startup rolled out Grok, an AI bot that was trained on and integrated into X, the social media platform formerly known as Twitter.

Musk has touted Grok as a “non-woke” alternative to rival OpenAI’s ChatGPT and other learned language models.

In the blog posting which announced the funding, xAI said it was “primarily focused on the development of advanced AI systems that are truthful, competent, and maximally beneficial for all of humanity.”

Musk recently told investors xAI is planning to build a supercomputer to power the next version of Grok, The Information reported on Saturday citing a presentation to investors.

Musk said he wants to get the proposed supercomputer running by the fall of 2025, as per the report, adding that xAI could partner with Oracle to develop the massive computer.

The Post has sought comment from xAI and Oracle.

When completed, the connected groups of chips — Nvidias flagship H100 graphics processing units (GPUs) — would be at least four times the size of the biggest GPU clusters that exist today, The Information reported, quoting Musk from a presentation made to investors in May.

Nvidia’s H100 family of powerful GPUs dominate the data center chip market for AI but can be hard to obtain due to high demand.

Earlier this year, Musk said training the Grok 2 model took about 20,000 Nvidia H100 GPUs, adding that the Grok 3 model and beyond will require 100,000 Nvidia H100 chips.

With Post Wires

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