Samedia—Elon Musk’s generative AI startup, xAI, has raised $6 billion in a Series C funding round, bringing the company’s total funding to $12 billion. The latest round, which includes participation from notable investors like A16Z, Blackrock, Fidelity Management & Research Company, Kingdom Holdings, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, and Vy Capital, puts xAI’s valuation at over $40 billion. GPU companies Nvidia and AMD also participated in the round.
The new funds are expected to be primarily spent on acquiring an additional 100,000 Nvidia GPUs. This follows the launch of xAI’s supercomputer in Memphis this summer, which features up to 100,000 Nvidia H100 GPUs.
According to reports, only investors who backed xAI in its previous fundraising round were permitted to participate in this one. Investors who helped finance Musk’s Twitter acquisition were given access to up to 25% of xAI’s shares.
This latest round continues the momentum from May when xAI also raised $6 billion. CNBC reported last month that xAI was targeting a $50 billion valuation, double its valuation from six months ago.
Meanwhile, xAI has secured approval for 150 megawatts of power from the Tennessee Valley Authority (TVA) for its supercomputer facility. This significantly boosts the energy supply, enabling the facility to run all 100,000 GPUs concurrently—a feat previously limited by available power. However, the massive energy demand has raised concerns among local stakeholders about the impact on the region’s power grid.
xAI said the new funds would be deployed toward building more AI infrastructure and further developing its flagship models.
The investment underscores the growing interest and confidence in AI technologies, particularly those developed by xAI, as it continues to push the boundaries of artificial intelligence and its applications.
