xAI raised a $6B Series B from Valor, Vy Capital, a16z, Sequoia, Saudi Arabia's Kingdom Holding, and others, Elon Musk says at an $18B pre-money valuation

xAI is pleased to announce our series B funding round of $6 billion. — xAI is pleased to announce...

xAI 2024-05-28

Context & Ripple Effects

xAI entered the round after reports that it had secured initial commitments and was targeting a valuation range that included the one ultimately announced. The disclosed financing converts that early funding target into a large, named-investor round, following reports of commitments from major venture firms.

The investor group combines established venture capital with Kingdom Holding, making the round relevant not just as startup financing but as a test of how large AI developers assemble capital from multiple institutional pools.

First-order effects

xAI receives $6 billion to fund its operations and development, while the $18 billion pre-money valuation sets the ownership price for the Series B investors.
Valor, Vy Capital, a16z, Sequoia and Kingdom Holding become financially aligned with xAI’s ability to advance Grok toward the capabilities Musk had sought.

Second-order effects

The round establishes a valuation and funding benchmark for other frontier-model developers approaching the same late-stage investor base.
Kingdom Holding’s participation broadens xAI’s capital mix beyond conventional venture investors, increasing the importance of strategic and sovereign-backed capital in its financing options.

Third-order effects

If similar rounds continue, frontier AI development may become concentrated among companies able to repeatedly raise multibillion-dollar pools from a small set of global investors.
The financing points toward a model in which access to institutional capital becomes as consequential as software progress for independent AI developers.

The trend: Frontier AI companies are increasingly financing model development through large, blended rounds that pair venture firms with strategic and sovereign-linked investors.

Discussion

@xai @xai on x
xAI is pleased to announce.. https://x.ai/...
@carnage4life Dare Obasanjo on x
Elon Musk's xAI raises SIX BILLION dollars to build an anti-woke chatbot from investors including Andreessen Horowitz, Sequoia, Fidelity and Saudi Arabia Kingdom's Holding. Elon kicked off layoff season with Twitter layoffs, maybe he's kicking off ZIRP 2.0 now? 🤷🏾‍♂️ [image]
@elonmusk Elon Musk on x
Join xAI if you believe in our mission of understanding the universe, which requires maximally rigorous pursuit of the truth, without regard to popularity or political correctness
@mikebutcher Mike Butcher on x
Elon Musk's xAI raises $6B from Valor, a16z, and Sequoia. Given the way he's treated staff at Xitter, I'm sure engineers will be falling over themselves to join... https://techcrunch.com/...
@elonmusk Elon Musk on x
@xai Pre-money valuation was $18B
@jimmybajimmyba Jimmy Ba on x
Show me the chips
@didier_lopes Didier Lopes on x
$6b in funding for Series B we are so back
@andrewcurran_ Andrew Curran on x
Long been rumoured in the press, now reality. [image]
@elonmusk Elon Musk on x
@xai There will be more to announce in the coming weeks
@devindkim Devin Kim on x
it's official! super fortunate to be part of this world class team—big news soon. back to building...🧑🏻‍💻 [image]
@johnhering @johnhering on x
Now the real work begins. xAI is hiring for numerous roles and seeks talented individuals ready to join a small team focused on making a meaningful impact on the future of humanity. Those interested can apply today at https://x.ai/...
@jamestitcomb James Titcomb on x
We're going to look back at this moment with utter bemusement. A bunch of companies raising billions to buy the same Nvidia chips and build LLMs that most people can't tell apart
r/singularity r on reddit
xAI (@xai) on X- $6 B funding
@dimatosj John Dimatos on threads
New grift just dropped How does this not create a shareholder lawsuit for Tesla considering all his bs fanfare that Tesla is an AI company
@karaswisher Kara Swisher on threads
As if we need a reminder on the non ethics of @a16z
@paul_rietschka Paul Rietschka on threads
Musk is one of a handful who, despite any failure small, large, or gargantuan, will never lose access to capital. This man destroyed Twitter, the greatest self-induced destruction of business value in corporate history. Now he “founds” an OAI copycat and, despite OAI itself hav…
@moskov Dustin Moskovitz on threads
Your regular reminder that the official a16z position on tech ethics is “anti”.
@ylecun Yann LeCun on x
@elonmusk Join xAI if you can stand a boss who: - claims that what you are working on will be solved next year (no pressure). - claims that what you are working on will kill everyone and must be stopped or paused (yay, vacation for 6 months!). - claims to want a “maximally rigor…
@garymarcus Gary Marcus on x
24B valuation, largest series A or B in history, yet no (?) revenue, no moat, nothing SoTA. 🤷‍♂️
@nearcyan Near on x
@xai “no, no, it's fine. I think a 100% nvidia portfolio is a really reasonable bet. all i do is trust the numbers, alright” [image]
@headinthebox Erik Meijer on x
https://x.ai/... A sizable initial round for an AI startup is 6M if you are lucky. This is 1000x more. That sucks a lot of oxygen out of the room. But then Meta has spent $46B and counting on the Metaverse since 2021. Which another 10x. Think about that, Meta has been
@moonlogic_games @moonlogic_games on x
@Yuchenj_UW @GaryMarcus I'm not that smart, admittedly, but I have a hard time believing that twitter data is worth 24 billion dollars.
@garymarcus Gary Marcus on x
C'mon, man, tweets like this are priceless. AI will turn this stuff into a complete physical understanding of the world just like that [snaps fingers]. who needs Reddit when you have X? https://x.com/...
@ylecun Yann LeCun on x
@bneiluj ... And there is absolutely nothing wrong with working at Meta
@danprimack Dan Primack on x
Just waking up to see the https://x.ai/ news. Big question on the $6 billion is if it's all primary capital, or if some is the value of equity given to X Holdings shareholders (a16z, Sequoia, Fidelity, etc). Trying to get an answer. Flashback: https://www.axios.com/...
@garymarcus Gary Marcus on x
Grok has done its own research. Elon must be so proud. [image]
@elonmusk Elon Musk on x
@ylecun Prepare to be regulated! 😂
@ylecun Yann LeCun on x
@elonmusk You happy about “don't train a model with more than 10^26 flops” ?
@ylecun Yann LeCun on x
@giffmana @elonmusk You go first about your shop.
@ylecun Yann LeCun on x
@how_many_roads_ @elonmusk I like his cars, his rockets, his solar panels, and his satellite network. I very much dislike his vengeful politics, his conspiracy theories, and his hype.
@elonmusk Elon Musk on x
@ylecun ... Yann is “just following orders”
@kenhowery Ken Howery on x
Thrilled to be joining as an investor in xAI's first external funding round. Congratulations to @elonmusk and the entire @xai team. Excited to see the future of AI unfold with this incredible team and their vision for a ‘maximally curious’ AI. https://x.ai/... #xAI #AI
r/wallstreetbets r on reddit
‘More to come’: Elon Musk's xAI raises $6 billion in latest funding round
r/ChatGPT r on reddit
‘More to come’: Elon Musk's xAI raises $6 billion to take on ChatGPT
r/OpenAI r on reddit
Elon Musk's xAI raises $6 billion as it closes in on OpenAI
r/elonmusk r on reddit
Elon Musk's xAI raises $6 billion to fund its race against ChatGPT and all the rest
@realphilgold.bsky.social @realphilgold.bsky.social on bluesky
Ok that's not shady at all [embedded post]
@sundeep Sunny Madra on x
AI infrastructure companies: [image]
@lifebypixels Mark Heaps on x
AI Infrastructure looking at the road ahead. ... “rowr” If only, maybe, there was a company with hardware that sets the new standard for ultra fast AI. [image]
@danprimack Dan Primack on x
3/ Last notable thing here is that, unlike most other mega-rounds for AI companies, this announcement didn't include “in-kind” compute capacity from MSFT, AMZN, etc. Or disclosure of an Oracle deal. Would love to know how value of excess Tesla/Twitter compute capacity is
@chrisfralic Chris Fralic on x
Fidelity has marked down its investment in Twitter / X by 71% which implies a valuation of less than half of the price it just invested in xAI
@danprimack Dan Primack on x
xAI announced $6b in Series B funding at what @elonmusk says is a $24 billion post-money valuation. All $6b is new cash, not the value of any equity “given” to those who helped Musk buy Twitter/X. That said, there's a bunch of investor overlap. a16z, Sequoia, Fidelity, etc.

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