BlackRock, a16z back Elon Musk’s xAI in $6B funding round

Elon Musk’s artificial intelligence company xAI, announced Monday it had raised $6 billion in a Series C funding round, with backing from major investors including BlackRock, Andreessen Horowitz (a16z), Fidelity, Morgan Stanley, and other high-profile investors.

Strategic investors NVIDIA and AMD also participated in the round, continuing their support for xAI’s infrastructure scaling efforts. The funding round was exclusive to xAI’s existing investors, many of whom had previously supported Musk’s acquisition of X, according to Financial Times.

The latest financing, first revealed through a SEC filing last week, brings xAI’s total funding to $12 billion. It follows a previous $6 billion round completed earlier in 2024. According to CNBC, Musk’s AI business targets a valuation of around $50 billion, which would double its valuation six months ago.

The fresh capital will be used to support the research and development of xAI’s generative AI model, Grok, and to expand its infrastructure, the team shared in the announcement.

Since its Series B funding in May 2024, xAI has launched several key initiatives, including Colossus, which it describes as “the world’s largest AI supercomputer,” Grok 2, and the xAI API for developers.

The company also introduced Aurora, its proprietary image generation model, and integrated Grok with the X platform to provide real-time information processing capabilities.

xAI is currently training Grok 3, which it calls its “most powerful model yet.” The company aims for it to be comparable to or even surpass OpenAI’s GPT-5, with a focus on enhancing its capabilities in natural language understanding, image generation, and coding tasks.

Musk anticipates that Grok 3 will be launched by the end of this year. Following its release, xAI plans to expand its infrastructure to include 200,000 GPUs, with the potential to scale up to as many as 300,000 GPUs in the future.