Compiled by: MetaverseHub
On May 27, Musk's big model startup xAI officially announced that it had received $6 billion in Series B financing, with a valuation of approximately $24 billion, becoming a unicorn in one fell swoop.
01. Musk’s supercomputer idea
Earlier, The Information reported that Musk's artificial intelligence startup xAI plans to build a large supercomputer to enhance the capabilities of its artificial intelligence chatbot Grok.
The supercomputer, which Musk calls a "supercomputing factory," is expected to be ready in the fall of 2025, possibly in partnership with Oracle Corp. Musk hopes that this development will greatly exceed the size and capabilities of rival GPU clusters.
Musk revealed in a presentation to investors that the new supercomputer will use up to 100,000 Nvidia H100 GPUs based on the Hopper architecture, making it at least four times the size of the largest existing GPU cluster.
Nvidia's H100 GPUs are very popular in the AI data center chip market, and they were once difficult to supply due to strong demand last year. However, these GPUs are no longer Nvidia's top products. The company is about to launch the H200 computing GPU for AI and HPC applications, and is preparing to launch the Blackwell-based B100 and B200 GPUs in the second half of this year.
It’s unclear why xAI decided to use essentially last-generation technology in its 2025 supercomputer, but the massive hardware investment must reflect xAI’s ambitions.
xAI is also trying to compete directly with AI giants like OpenAI and Google.
Musk, who is also one of the co-founders of OpenAI, positions xAI as a strong challenger in the field of artificial intelligence, which is exactly why he wants to build a supercomputer.
According to Musk, the Grok 2 model required about 20,000 Nvidia H100 GPUs to train, and future iterations (such as Grok 3) will require up to 100,000 GPUs.
Neither xAI nor Oracle declined to comment on the partnership when contacted, a silence that has left people speculating on some of the details of the collaboration and the supercomputer project.
However, Musk's presentation to investors emphasized his commitment to advancing artificial intelligence technology through major infrastructure investments and strategic partnerships.
0.26 billion USD in financing
The supercomputer project coincides with xAI’s recently announced $6 billion Series B funding round.
“xAI is pleased to announce our $6 billion Series B funding round, with lead investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed B in Talal, and Kingdom Holding, among others,” xAI said in a statement.
The funds from this round will be used to bring xAI’s first products to market, build advanced infrastructure, and accelerate research and development of future technologies, the statement added.
xAI also said it will “continue on this steep trajectory in the coming months,” with multiple exciting technology updates and products expected to be announced soon.
The funding is expected to fuel xAI’s product development, infrastructure buildout, and future AI research.
xAI launched Grok in November 2023 with the goal of being “more than just a traditional chatbot.” However, as Grok evolved, such as Grok 1.5 with long-context understanding and Grok 1.5V with visual information processing, its computing requirements increased dramatically.
The report added that training the Grok 2 model will require 20,000 Nvidia H100 GPUs, while Grok 3 and beyond will require 100,000 Nvidia H100 GPUs.
The extraordinary growth in computing needs necessitates a supercomputer. Currently, the leaders in the supercomputer race are Frontier (USA), Aurora (USA), Eagle (USA), and Fugaku (Japan).
Although the exact specifications of the xAI planned supercomputer are not yet known, if xAI's above requirements are met, it will fall into the category of supercomputers and has the potential to challenge the dominance of existing machines.
03. The battle between xAI and OpenAI
xAI says it has experienced rapid growth over the past year, as outlined in a recent blog post from the company.
“From the announcement of the company in July 2023, to the release of Grok-1 on X in November, to the recently announced improved Grok-1.5 model with long-context capabilities, to Grok-1.5V with image understanding capabilities, xAI’s model capabilities have improved rapidly.”
The Grok chatbot was released to X Premium Plus users in December. Unlike traditional chatbots, Grok reportedly draws inspiration from conservative commentators such as Tucker Carlson and Joe Rogan and is programmed to display politically incorrect and witty personalities.
“With the open source release of Grok-1, xAI opens the door to advances in a variety of applications, optimizations, and model extensions,” xAI added.
Musk was closely associated with OpenAI as a co-founder, but he left OpenAI a few years ago to pursue his own path in developing artificial intelligence, and the two sides had a fierce dispute as a result.
Musk has launched legal action against his former company and its current CEO, Altman, alleging that they have betrayed the company's original purpose, which was to benefit humanity rather than pursue profits.
Therefore, xAI particularly emphasizes: "xAI is mainly committed to developing advanced artificial intelligence systems to make them real, competent, and bring the greatest benefit to all mankind. The mission is to understand the true nature of the universe."
Meanwhile, OpenAI, whose CEO Altman is seeking trillions of dollars to transform the global chip industry, and Musk, a founding member of OpenAI, is suing the company, claiming it has abandoned its mission to benefit humanity.
In short, this huge $6 billion financing will help xAI accelerate the development and iteration of its chatbot Grok, enabling it to compete with large models of artificial intelligence leaders such as OpenAI's GPT, Meta's Llama, Anthropic's Claude, and Google's Gemini. The future development of xAI is worth looking forward to.
