The company plans to utilise the new funds to acquire an additional 100,000 Nvidia chips for training its AI models. Credit: sdx15/Shutterstock.

Artificial intelligence (AI) company xAI has secured $5bn in a funding round taking the valuation of Elon Musk’s startup to $50bn, the Wall Street Journal reported.  

Qatar Investment Authority, Valor Equity Partners, Sequoia Capital, and Andreessen Horowitz are said to have participated in the financing round. 

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The latest financing round brings xAI’s total fundraising to $11bn this year.  

The company plans to utilise the new funds to acquire an additional 100,000 NVIDIA chips for training its AI models, the news publication added. 

Since its inception in July 2023, xAI has been developing Grok-1, a competitor to ChatGPT. It was released in November 2023 for premium X subscribers.   

In May 2024, xAI was valued at $24bn after the company raised $6bn in Series B funding, backed by investors including Andreessen Horowitz, Sequoia Capital, and Kingdom Holding. 

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It was reported in October that xAI aimed to raise “several billion dollars” in a funding round, targeting a valuation of around $40bn.  

In September, xAI launched its Colossus 100k H100 training cluster. Elon Musk, in a post on X, described it as “the most powerful AI training system in the world” and announced plans to double its size to 200k (50k H200s) in the coming months. 

An Nvidia GPU, H200 is designed to accelerate generative AI and large language models.  

Menlo Ventures, a Venture capital firm investing in generative AI, reported a sixfold increase in enterprise spending on generative AI this year, from $2.3bn in 2023 to $13.8bn in 2024.