Elon Musk's xAI secures $20B in funding backed by Nvidia and Cisco.

Large language model developer xAI Corp. announced today that it has raised $20 billion in late-stage Series E funding. Nvidia Corp. and Cisco Systems Inc. participated in the round, alongside Valor Equity Partners, Stepstone Group, Fidelity Management & Research, Qatar Investment Authority, MGX, Baron Capital Group and others. In November, CNBC reported that xAI's next funding round would value it at $230 billion.

The capital will support expansion of xAI's artificial intelligence infrastructure. The company trains its flagship Grok series of LLMs on a supercomputer called Colossus, which came online in September 2024 with 100,000 graphics processing units. On occasion of today's funding round, xAI disclosed that Colossus now hosts "over one million H100 GPU equivalents." Last week, Elon Musk announced that the company had bought a new data center to expand the supercomputer's processing capacity. The Information reported that the facility is a former warehouse located outside Memphis, reportedly close to a power plant that xAI is building to address Colossus' energy requirements. According to Musk, the planned upgrades will boost the supercomputer's electricity consumption to 2 gigawatts—enough to power more than one million households.

In addition to infrastructure expansion, xAI will deploy funding toward new products for both consumer and enterprise markets. Last month, xAI introduced Grok Enterprise, which includes a Google Drive integration allowing workers to search cloud-stored files, alongside cybersecurity tools that let organizations define access controls and use their own encryption keys to protect business data. The company plans to add integrations with other third-party services and roll out collaboration features and the ability to create custom AI agents. These updates will launch alongside Grok 5, xAI's next flagship LLM, which the company disclosed has already begun training, though no launch date or capability details were specified.

Today's funding round follows OpenAI Group PBC's reported $22.5 billion raise from SoftBank Group Corp., announced as part of a $40 billion funding round the companies announced in March. Like xAI, OpenAI is constructing significant new data center infrastructure to support its AI training efforts.