Elon Musk’s artificial intelligence firm xAI revealed on Tuesday that it had secured $20 billion in a Series E fundraising round, surpassing its original $15 billion target as the company accelerates the growth of its AI technology and related infrastructure.
The funding round drew investments from prominent backers, including Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, and the Qatar Investment Authority, according to xAI.
Nvidia and Cisco Investments were also added as strategic partners in this round, with xAI noting that their involvement is expected to support the expansion of its computing resources.
Currently, xAI is working on its Grok 5 model, which represents the next evolution in its AI development. The startup confirmed that the capital will be utilized to enhance infrastructure, speed up the introduction and scaling of AI-based products, and support ongoing research initiatives.
Despite recent warnings of a potential asset bubble within the sector, investor appetite for AI-focused deals remains robust, fueled by the substantial investments required for computing capabilities and new AI models.
xAI has been aggressively growing its presence in the data center market, aiming to advance its AI systems as it seeks to challenge established competitors such as OpenAI’s ChatGPT and Alphabet’s Gemini.
