Musk raises $20bn for start-up xAI

Elon Musk has announced that his company xAI has raised $20 billion in new funding, in a deal that more than doubles the company's valuation since last spring, despite growing concerns about illegal content generated by its artificial intelligence. The Financial Times writes.

The start-up, which develops the chatbot and Grok model, was initially aiming for a $15 billion financing deal, with a valuation of $230 billion. On Tuesday xAI announceda larger-than-expected round, with the participation of Valor Equity Partners, Fidelity Investment Management, the Qatar Investment Authority and the Abu Dhabi Mgx fund. Strategic investors include Nvidia and Cisco, which the company says will provide support for its computing resources. Nvidia supplies chips to xAI, which power the training and operation of its artificial intelligence models.

In July, xAI had raised USD 10 billion in loans and cash investments to finance the construction of the Colossus data centre in Memphis, Tennessee. In June, it had also sold $300 million of shares in a secondary offering. The announcement comes as attention grows on xAI after Grok's image-generating feature created sexualised images of minors and adults, 'stripping' them without consent.