Updated December 25, 12:21 p. m. Pacific: Additional details on xAI's valuation and Kingdom Holdings' investment were included. xAI, Elon Musk’s artificial intelligence company, has secured $6 billion in a Series C funding round. Key investors include Andreessen Horowitz, Blackrock, Fidelity, and others, with Saudi’s Kingdom Holdings contributing approximately $400 million. xAI's current valuation is $45 billion, nearly doubling its previous worth. The funds bring xAI's total raised amount to $12 billion, up from a $6 billion round in May. According to the Financial Times, only previous xAI backers could join this round. Investors involved in Musk's Twitter acquisition were allowed access to up to 25% of xAI’s shares. xAI plans to use the funds to advance its infrastructure and product innovation. Elon Musk founded xAI last year, launching Grok, a generative AI model that powers features on X, formerly Twitter, including a chatbot available to certain users. Grok stands out by responding to provocative queries often ignored by other AIs.

It has been integrated into X with features like image generation and news summarization, albeit with some controversies. xAI aims to compete with bigger AI firms like OpenAI and Anthropic. It recently launched an API and a test Grok iOS app. Musk has filed a lawsuit against OpenAI, claiming it and Microsoft are stifling competition by pressuring investors not to fund rivals like xAI. Musk claims xAI benefits from X's data, as recent policy changes allow model training on user posts. Musk, a former OpenAI founder, departed due to differing visions and has critiqued OpenAI for not adhering to its original nonprofit mission. xAI plans to use data from Musk's companies, including Tesla and SpaceX, to enhance its models. It's involved with SpaceX’s Starlink service and is negotiating with Tesla for research collaboration. Tesla shareholders have sued Musk over this, alleging resource diversion to xAI. xAI’s revenue is about $100 million annually, while Anthropic and OpenAI project much higher revenues. xAI is expanding hardware capabilities and personnel, growing to over 100 employees and moving into OpenAI’s former offices in San Francisco. Overall, xAI is preparing to raise more funds next year, amid a competitive AI funding environment where firms like Anthropic and OpenAI also secure large investments, contributing to a total of $31. 1 billion in AI venture capital in Q3 2024, according to PitchBook data.