Nov 5, 2024

Nvidia in talks to invest in Elon Musk’s AI startup, xAI Nickie Louise Posted On November 4, 2024 Elon Musk’s AI startup xAI is reportedly in discussions with Nvidia to secure a major investment aimed at accelerating the development of its large language model, Grok, according to a report from the New York Post. Sources told the Post the discussions could significantly impact the AI landscape, especially with NVIDIA’s strategic focus on advancing AI. Additionally, The Wall Street Journal stated that xAI is in talks with investors to raise billions, valuing the company at around $40 billion. The Information also noted that Musk is seeking strategic investors, primarily tech companies, to support this funding round, with no names confirmed yet. Venture firms including Sequoia Capital, Andreessen Horowitz, and Vy Capital are said to be part of these ongoing discussions. “Elon Musk’s artificial intelligence startup xAI has discussed raising $5 billion from investors at a valuation of about $45 billion, according to a person familiar with the discussions. Investors could include a mix of returning backers, including Valor Equity Partners,” The Information reported . This potential funding comes just six months after xAI’s Series B round, which raised $6 billion from Andreessen Horowitz and others, valuing the company at $18 billion pre-money and $24 billion post-money. These funds have been directed toward launching xAI’s initial products, building out advanced infrastructure, and expanding research and development efforts. Musk’s Grok, a large language model developed by xAI, is already gaining attention on X despite launching later than competitors like OpenAI’s ChatGPT. Grok’s rapid growth has put xAI in the spotlight, making it a notable contender in the competitive AI landscape. NVIDIA, meanwhile, has declined to comment on the rumored investment. However, NVIDIA CEO Jensen Huang expressed admiration for Musk’s ability to lead large-scale, high-speed projects. According to Teslarati, Huang mentioned that the xAI team assembled a cluster of 100,000 H200 Blackwell GPUs in just 19 days—an accomplishment Huang said would typically take years. “There’s only one person in the world who could do that. Elon has a unique grasp of engineering, construction, and scaling large systems,” Huang remarked. xAI’s progress has been rapid. In July 2024, it launched its Memphis Supercluster, a supercomputer with up to 100,000 liquid-cooled NVIDIA H100 GPUs, positioned as one of the most powerful AI training systems globally. In October 2024, NVIDIA announced that xAI’s Colossus cluster, powered by 100,000 NVIDIA Hopper Tensor Core GPUs, had been optimized for training Grok models using NVIDIA’s Spectrum-X Ethernet networking. Colossus is already supporting Grok’s development, with xAI planning to double the cluster to a total of 200,000 GPUs. Launched by Musk in July 2023, xAI set out with a mission to explore the universe’s deepest mysteries. The xAI team includes top talent from companies like Google DeepMind, OpenAI, Microsoft Research, and Tesla—people who have driven advancements such as DeepMind’s AlphaCode and OpenAI’s GPT-3.5 and GPT-4. Musk appears to be positioning xAI as a formidable player in the AI space, aiming to compete with giants like OpenAI, Google, and Anthropic, each known for their flagship AI models. Although Musk co-founded OpenAI in 2015, he left the board in 2018 and has since voiced skepticism about Big Tech’s direction in AI, citing concerns about potential censorship. Musk’s recent AI vision includes a “truth-focused” AI, designed to counter offerings like Google’s Bard and Microsoft’s Bing AI by exploring fundamental truths about the universe. 0