Elon Musk’s xAI Targets $6B for Nvidia Chips, $50B Valuation Plan

Elon Musk’s xAI intends to raise $6 billion for 100,000 Nvidia chips, aiming for a $50 billion valuation with a new Memphis data center.

Elon Musk’s xAI is raising $6 billion to buy 100,000 Nvidia chips for its data center in Memphis. Reports say that the artificial intelligence business wants to be worth $50 billion.

According to Faber’s sources, the funding round will include $5 billion from Middle Eastern sovereign funds and an additional $1 billion from a variety of investors, some of whom may want to increase their stakes. We expect the round to close early next week.

Tesla will use this money to purchase Nvidia chips necessary for its Full Self-Driving technology, which will utilize the new supercomputer in Memphis.

Musk says that the goal of his AI company when it starts up in July 2023 is to “understand the true nature of the universe.” XAI released an AI chatbot named Grok in November of last year. It was based on “The Hitchhiker’s Guide to the Galaxy.”

XAI’s New Chatbot Aims to Rival OpenAI

According to reports, the chatbot underwent two months of training and now possesses extensive knowledge about the internet. With Grok, XAI hopes to compete with big names like OpenAI, which Musk helped start but left in 2018 after a fight with co-founder Sam Altman.

It will also be going up against Google’s Bard and Anthropic’s Claude. Early in 2023, Musk reportedly purchased thousands of high-performance graphics processing units (GPUs) from Nvidia. Building a large language model requires these GPUs.