Elon Musk's AI startup xAI announced that it secured $20 billion in its most recent funding round, exceeding its original $15 billion goal as the company speeds up the development of its Grok AI models.

Established by Musk, xAI rivals other players in the growing generative AI sector, including OpenAI, Google, and Anthropic, among others.

The significant funding round highlights persistent investor interest in AI projects, even amid larger concerns regarding the realization of returns from the hefty investments being undertaken.

The round, which saw high demand, attracted investments from Valor Equity Partners, Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, MGX, and Baron Capital Group, as stated by the company.

AI powerhouse Nvidia also took part and will aid in the expansion of xAI's computing infrastructure by providing its sought-after AI chips and software.

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The funding round occurred as Musk, who additionally possesses the X social media platform, has faced turmoil regarding the Grok AI tool.

Grok is encountering increasing global criticism for permitting users to create sexualized deepfakes of women and minors using a feature it terms Spicy Mode.

In its funding round announcement, xAI highlighted notable advancements in 2025, including the launch of what it asserts to be the largest AI supercomputers globally.

The Colossus I and II data centers in Memphis now contain more than one million high-performance GPUs, the AI chips from Nvidia that are accelerating AI advancements.

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The startup has launched its Grok 4 language models along with Grok Voice, a real-time voice agent currently available in Tesla cars.

xAI states that its offerings impact around 600 million monthly active users on the X platform and Grok apps.
The firm stated that it is in the process of training Grok 5 and aims to introduce new products for consumers and businesses.

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xAI was established on March 9, 2023, by Musk. He hired Igor Babuschkin as Chief Engineer, who had previously worked with Google's DeepMind division. On July 12, 2023, Musk made an official announcement regarding the establishment of xAI. As of July 2023, xAI was based in the San Francisco Bay Area.