On December 23, 2024 xAI, Elon Musk’s AI company, announced that it had closed a 6 billion dollar Series C funding round. In its own release the company said the round drew investors including a16z, BlackRock, Fidelity, Lightspeed, MGX, Morgan Stanley, Sequoia Capital, Valor Equity Partners, and Vy Capital, and that “strategic investors NVIDIA and AMD also participated and continue to support xAI in rapidly scaling its infrastructure.” The round roughly doubled the company’s valuation to about 45 billion dollars and brought total funding to around 12 billion dollars.
The release tied the money directly to compute. xAI pointed to Colossus, which it described as “the world’s largest AI supercomputer,” built with an NVIDIA full-stack reference design and 100,000 NVIDIA Hopper GPUs. The company emphasized the speed of the buildout: Colossus was “fully operational in 122 days” and began running workloads “just 19 days after the first servers were delivered.” The stated use of funds was to accelerate infrastructure, ship products built on Grok and Colossus, and fund future research.
The detail that a chipmaker (NVIDIA) and its rival (AMD) both invested in a major buyer of their GPUs is part of the same pattern that later drew bubble scrutiny: suppliers taking equity stakes in the customers whose purchases drive supplier revenue.
Why a business reader should care: this raise shows the sheer cost of entering the frontier-model race - billions of dollars in a single round, raised primarily to buy and power tens of thousands of GPUs - and illustrates how chip vendors became financial backers of the labs buying their hardware.