Elon Musk has a lot going on as 2024 winds to a close.
The CEO of both Tesla (TSLA) and SpaceX is finishing a busy year that brought plenty of updates from both companies.
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Now, Musk is gearing up to begin his tenure as co-head of the Department of Government Efficiency (DOGE), which he will operate with Vivek Ramaswamy.
Musk may be preparing to take on Capitol Hill, but that doesn’t mean his companies are slowing down. In fact, one of his ventures recently completed a new funding round and has raised a significant amount of money, most of which came from some of the tech sector’s most prominent names.
Musk has successfully raised so much money for one of his newest projects, suggesting that Silicon Valley still believes in him, even as he prepares to divide his time between the public and private sectors.
Elon Musk has plenty to celebrate, as one of his companies has received investments from some of the industry’s biggest names . (Photo by Antonio Masiello/Getty Images)
Antonio Masiello/Getty Images
Musk’s new company has a long list of backers
With Tesla and SpaceX making so many headlines, it can be easy to overlook Musk’s other companies. But recently, some investors have been focused on xAI, his artificial intelligence (AI) venture that appears to be garnering significant momentum.
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Christmas seems to have come early for Musk this year. On December 23, xAI published a blog post announcing that it had closed out a Series C funding round and managed to raise $6 billion in the process, setting it up nicely to continue expanding in 2025.
A major cash influx is always great news for a startup. But even more significant is the fact that xAI has received investments from many prominent names, spanning both Wall Street and Silicon Valley, both fellow tech companies and prominent venture capital (VC) firms.
Among the firms that participated in the xAI Series C financing round were Morgan Stanley (MS) , BlackRock (BLK) and Fidelity Management & Research Company, and VC firms Andreessen Horowitz and Sequoia Capital.
AI chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) also participated, as did Saudi conglomerate Kingdom Holdings, which publicly disclosed a $400 million investment. Musk posted on X, making it clear he welcomed the Nvidia investment.
It’s an honor to have @nvidia as an investor
— Elon Musk (@elonmusk) December 25, 2024
As xAI notes in the announcement, “The funds from this financing round will be used to further accelerate our advanced infrastructure, ship groundbreaking products that will be used by billions of people, and accelerate the research and development of future technologies enabling the company’s mission to understand the true nature of the universe.”
So far, xAI is often best known for Grok AI, a chatbot that is currently available via Musk’s X network (formerly Twitter). However, its other projects include Colossus, billed as the world’s fastest supercomputer, powered by 100,000 NVIDIA Hopper graphics processing units (GPUs).
In September 2024, Musk posted on X praising Nvidia for its products’ role in getting Colossus online in just 122 days. A spokesperson for xAI offered further context on Nvidia’s collaboration with Musk’s venture, highlighting the power of both the Hopper GPU and Spectrum-X, Nvidia’s Ethernet networking platform.
According to the statement, Nvidia’s AI innovations allowed xAI’s team to “push the boundaries of training AI models at a massive scale, creating a super-accelerated and optimized AI factory based on the Ethernet standard.”
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With the new cash influx generated by the recent Series C round, xAI looks poised to continue expanding in 2025. But this raises the question of what its growth could mean for other tech companies.
What’s next for xAI and its peers in 2025
Given how much xAI has accomplished since its founding in 2023, there’s little room for doubt that Musk is able to scale a company quickly.
Now, many prominent investors are lining up to support his latest company, signaling that they believe in his vision for xAI and in the power of this new technology to continue revolutionizing entire industries.
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Nvidia has a clear incentive to be behind OpenAI. If Musk continues to scale Colossus, it could easily result in more purchases. He recently ordered $1.08 billion worth of GB200 AI servers for xAI.
That said, Nvidia isn’t the only chipmaker that could benefit from Musk’s new AI push.
Early in 2024, he announced plans to purchase chips made by AMD for Tesla, which is gearing up to start rolling out self-driving robotaxis in early 2025. Given the computational power that will likely be required to continue scaling and training its AI models, he could easily start buying chips from AMD for xAI as well.
With the new cash infusion, Musk will have more funds to invest in expanding xAI’s projects, which could generate more business for both Nvidia and AMD.
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