xAI announced on Tuesday that it has raised $20 billion in its latest funding round, exceeding its original $15 billion target. The funding will support faster development of the Grok AI models as the company competes in the fast growing generative AI market.
Founded by Musk, xAI operates in a crowded space alongside players such as OpenAI, Google, and Anthropic. The size of the funding round highlights continued investor confidence in AI companies, even as questions remain about long term returns on large scale investments.
The oversubscribed round saw participation from Valor Equity Partners, Stepstone Group, Fidelity Management and Research Company, Qatar Investment Authority, MGX, and Baron Capital Group, among others. Nvidia also joined the round and will help expand xAI’s computing infrastructure by supplying advanced AI chips and software.
The funding announcement comes at a time when Musk, who also owns the X social media platform, is facing criticism related to the Grok AI tool. Grok has drawn international backlash for allowing users to create sexualised deepfakes of women and minors through a feature known as Spicy Mode.
While announcing the funding, xAI highlighted major progress made in 2025. The company said it has deployed what it describes as the world’s largest AI supercomputers.
Its Colossus I and II data centres in Memphis now host more than 1 million high performance GPUs from Nvidia. These chips play a key role in powering advanced AI development.
xAI has also launched its Grok 4 language models along with Grok Voice, a real time voice assistant that is now available in Tesla vehicles.
According to the company, its services currently reach around 600 million monthly active users across the X platform and Grok applications. xAI said it is now training Grok 5 and plans to introduce new consumer and enterprise products in the future.
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