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Elon Musk's artificial intelligence startup xAI has raised $20 billion in its latest funding round, exceeding its initial $15 billion target as the company pushes forward with development of its Grok AI models, the company announced Tuesday.
The oversubscribed round drew investment from Valor Equity Partners, Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, MGX and Baron Capital Group, among others. AI chipmaker Nvidia also participated and will support xAI's computing infrastructure expansion by supplying its AI processors and software.
The substantial funding underscores continued investor appetite for AI ventures despite broader questions about achieving returns on the massive capital investments flowing into the sector. Founded by Musk, xAI competes in an increasingly crowded generative AI market against established players including OpenAI, Google, and Anthropic.
Announcing the funding round, xAI highlighted significant progress in 2025, including deployment of what it claims are the world's largest AI supercomputers. The company's Colossus I and II data centers in Memphis now house over one million high-performing graphics processing units, the specialized chips from Nvidia that have become essential to AI development.
The startup has rolled out its Grok 4 language models and Grok Voice, a real-time voice agent now available in Tesla vehicles. According to xAI, its services reach approximately 600 million monthly active users across Musk's X social media platform and Grok applications.
The funding round came as Musk, who also owns the X social media platform, has been embroiled in controversy over the Grok AI tool. The system is facing growing international backlash for allowing users to generate sexualized deepfakes of women and minors through a setting it calls Spicy Mode.
The company said it is currently training Grok 5 and plans to launch new consumer and enterprise products, though it provided no timeline for these releases.
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