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Source: Zhidongxi
Raised $12 billion in less than 7 months, what level is this?
This is the latest battle report from xAI, the AI large model company founded by Musk.
On December 24, Zhidongxi reported that today, xAI announced the completion of a $600 million (about RMB 4.38 billion) Series C financing round, with investors including A16Z, Blackrock, and others. Strategic investors NVIDIA and AMD also participated and continue to support the rapid expansion of xAI's infrastructure.
xAI disclosed that this round of financing will be used to further accelerate its advanced infrastructure, launch breakthrough products that will be used by billions of people, and accelerate the R&D of future technologies to achieve the company's mission of understanding the true nature of the universe.
Together with the $600 million Series B financing announced in May this year, this new capital has brought xAI's total financing to $12 billion (about RMB 87.6 billion). This means that xAI's valuation has exceeded the previously rumored $50 billion and is now on par with JD's $52.6 billion market capitalization. In terms of valuation, xAI has firmly secured the "second place" position among global large model unicorns, second only to OpenAI.
According to the Wall Street Journal, xAI previously told investors that it had raised $5 billion in a funding round, achieving a valuation of $50 billion (about RMB 364.9 billion), which is more than double its valuation (of $24 billion) six months ago.
According to documents filed with the U.S. Securities and Exchange Commission on Thursday, investors contributed at least $77,593 (with 97 participants, but the documents did not disclose their identities).
The Financial Times reported that only investors who supported xAI in the previous round were allowed to participate in this round. Investors who provided funding for Musk's acquisition of Twitter can acquire up to 25% of xAI's shares.
It is reported that xAI has informed investors of its plan to raise more funds next year.
xAI's most powerful model to date, Grok 3, is currently in training.
At present, xAI is focused on launching innovative new consumer and enterprise products that will leverage Grok, Colossus, and social platforms to change the way people live, work, and entertain.
01. Expand the world's largest AI supercomputer, which will be expanded to 200,000 GPUs
Musk founded xAI last July. Shortly after, the company released its flagship generative AI model, Grok. This model currently supports many features on the social platform ?, including chatbots available to ? Premium subscribers and free users in certain regions.
According to xAI's disclosure, since May this year, xAI has made significant technical progress and launched several key initiatives:
- Colossus, xAI has established a decisive hardware advantage with the world's largest AI supercomputer, which uses NVIDIA's full-stack reference design and is equipped with 100,000 NVIDIA Hopper GPUs. Compared to the typical multi-year industry timeframe, Colossus was fully operational within 122 days and began running workloads just 19 days after the initial server delivery. Soon, xAI will double the scale of Colossus to a total of 200,000 NVIDIA Hopper GPUs by using the NVIDIA Spectrum-X Ethernet networking platform.
- Grok 2, xAI's state-of-the-art language model with advanced reasoning capabilities.
- xAI API, which allows developers to programmatically access its base models and build on a new customized technology stack, enabling multi-region inference deployment for global low-latency access.
- Aurora, xAI's proprietary autoregressive image generation model for Grok, which enhances multimodal understanding, editing, and generation capabilities.
- Grok on ?, leveraging the platform to understand real-time events happening in the world, with recent additions of new features to enhance the experience, such as web search, citation, and the Aurora image generator.
Musk has described the Memphis data center as having the world's most powerful AI cluster. xAI is training the next-generation Grok models at the Memphis data center.
According to TechCrunch, the data center is currently partially powered by portable diesel generators. In November, xAI received approval from the Memphis area power authority to provide an additional 150MW of power, enough to power about 100,000 homes.
To gain the support of the agency, xAI has promised to improve the quality of drinking water in the city and provide Tesla-manufactured batteries to the Memphis grid at a discounted price. However, some residents have criticized this move, arguing that it will put strain on the grid and worsen air quality in the region.
Tesla also hopes to leverage the upgraded data center to improve its autonomous driving technology.
From an operational perspective, xAI has grown rapidly in the year since its inception, expanding from a team of just a few dozen employees in March 2023 to over 100 today. In October, xAI moved into the former OpenAI office space in San Francisco's Mission community.
02. Fully chasing AI competitors, with an estimated revenue of $100 million this year
Musk is particularly focused on defeating OpenAI.
He was one of the co-founders of OpenAI, but left the company in 2018 due to disagreements over the company's direction. In previous litigation, he argued that OpenAI had profited from his early involvement, but had violated its non-profit promise to make its AI research available to everyone. OpenAI has responded that these allegations are unfounded.
According to the Wall Street Journal, xAI has already provided customer support functions for SpaceX's Starlink internet service, and is reportedly in negotiations with Tesla to provide R&D services in exchange for a share of Tesla's revenue.
Tesla shareholders oppose these plans. Some have sued Musk over his decision to found xAI, claiming he is diverting talent and resources from Tesla to a essentially competing enterprise.
These transactions, as well as xAI's developer and consumer-facing products, have pushed xAI's annual revenue to around $100 million. In comparison, Anthropic is reportedly on track to generate $1 billion in revenue this year, while OpenAI's target is to reach $4 billion by the end of 2024.
According to TechCrunch, Grok has the "rebellious character" that Musk described - it is willing to answer "the kind of pointed questions that most other AI systems refuse to answer." For example, when instructed to be crude, Grok is happy to oblige and produce the kind of profanity and vulgarity that would not be heard on ChatGPT.
Grok itself is not willing to cross certain lines, nor is it willing to avoid political issues. However, Musk has mocked ChatGPT and other AI systems as being too "woke" and "politically correct." He has also claimed that Grok "maximizes for truth" and has less bias than other competing models.
Over the past year, Grok has gradually been integrated into ?. At launch, Grok was only available to ? users, and developers had to have sufficient skills to launch and run the "open source" version.
After integrating the Flux image generator, Grok can generate images on ? (controversially, without guardrails), as well as analyze images and summarize news and trend events (though not perfectly).
Reports indicate that Grok may eventually handle more ? functions, from enhancing ? search capabilities, account profiles, to helping with post analysis and reply settings.
xAI is fully chasing competitors like OpenAI and Anthropic to stand out in the generative AI race. The company launched an API in October that allows customers to integrate Grok into third-party applications, platforms, and services, and has just rolled out a standalone Grok iOS app for beta users.
Musk insists this is not a fair fight.
In a lawsuit against OpenAI and its close partner Microsoft, Musk's lawyers have accused OpenAI of "actively trying to destroy competitors like xAI by coercing investors not to fund them." Musk's lawyers claim that OpenAI also unfairly benefits from Microsoft's infrastructure and expertise, amounting to an "de facto merger."
Musk often says that the data from ? gives xAI an advantage over its competitors. Last month, ? changed its privacy policy to allow third parties, including xAI, to train models on ? posts.
According to the vision outlined by xAI, its models will be trained on data from TRON, SpaceX, and other companies under Musk's leadership, and then these models can be used to improve the technologies of these companies.
03.Conclusion: Intensive financing of the global AI race
xAI is not the only AI large model company that has raised a huge amount of funding.
Anthropic, a US large model unicorn, recently received $4 billion in funding from Amazon, bringing its total funding to $13.7 billion and valuing it at over $18 billion (about RMB 131.4 billion).
An even larger super unicorn is OpenAI, which announced in October this year that it had raised $6.6 billion in funding, increasing its total funding to $17.9 billion and post-investment valuation to $157 billion (about RMB 1,145.9 billion). In November this year, OpenAI was also reported to have received a $1.5 billion (about RMB 10.9 billion) investment from Japan's SoftBank Group.
PitchBook data shows that large transactions such as those involving OpenAI and Anthropic have driven AI venture capital activity to over 2,000 transactions and $31.1 billion in the third quarter of 2024.
In the past month, domestic large model companies have also released financing news intensively: on December 11, Beijing large model startup Mianbi Intelligence announced that it had recently completed a financing of hundreds of millions of yuan; on December 17, Beijing large model unicorn Zhipu announced that it had recently completed a 3 billion yuan financing; on December 18, Beijing AI video generation startup Aishi Technology announced that it had completed a financing of nearly 300 million yuan; on December 23, the Shanghai large model unicorn Jie Yue Xing Chen was reported to have completed a hundreds of millions of dollars Series B financing.
2024 is coming to an end, but with the push of the hot financing tide, the competition of large models in the new year seems to be even more intense.
