Elon Musk is unstoppable. This time, Musk is purchasing 100,000 chips for his new AI venture, xAI. Last summer, Musk announced that he had raised $6 billion in funding for xAI. What will this massive budget be used for? Let’s dive into the details of this exciting news.
Elon Musk buys 100,000 Nvidia chips for AI company xAI
The $6 billion raised will be used to launch xAI’s first products, create advanced infrastructure, and accelerate the research and development of future technologies. So far, xAI has introduced Grok, a chatbot developed as a competitor to OpenAI’s ChatGPT. Grok is currently available only to X Premium subscribers.
This funding round included major investors like Andreessen Horowitz, Sequoia Capital, and Saudi Arabian Prince Al Waleed bin Talal. Last year, xAI announced it was seeking up to $1 billion in equity investment. However, a few months ago, The Financial Times reported that xAI was seeking $6 billion, a claim Musk denied at the time. Now, it seems the $6 billion has indeed been raised.
Developing AI is not cheap. Each of Nvidia’s upcoming Blackwell B200 AI graphics cards costs between $30,000 and $40,000. According to a report last week, xAI will need 100,000 of Nvidia’s current H100 chips to support the upgraded version of the Grok AI chatbot. Musk told investors they plan to launch the new data center by fall 2025.
The race for AI chips, talent, and technology has never been this competitive. Tech giants like Google, Apple, Amazon, Microsoft, and Meta are spending billions on AI projects. Microsoft has formed a multi-billion-dollar partnership with OpenAI. OpenAI CEO Sam Altman is seeking trillions of dollars to renew the global chip industry. Meanwhile, Musk is suing OpenAI, claiming it has deviated from its mission to benefit humanity.
Elon Musk has expressed a preference for developing products related to AI and robotics outside of Tesla. Tesla shareholders will vote on whether to reinstate Musk’s $56 billion pay package. The annual meeting will be held on June 13.
What else does the world of AI have in store for us? We need to be ready because Elon Musk is playing big again. What do you think? Share your thoughts in the comments section below.
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