Capital supports Musk! xAI raises $20 billion, exceeding expectations, with valuation doubling in a year

Despite facing regulatory scrutiny, Elon Musk's artificial intelligence startup xAI has successfully completed a massive financing round.

On January 7th, the Financial Times reported that xAI announced it had raised $20 billion in its latest financing round. This amount not only exceeds the company's initial target of $15 billion but also doubles its valuation since last spring, reaching $230 billion.

This financing round attracted participation from top global capital, including Valor Equity Partners, Fidelity Investments, the Qatar Investment Authority, and the Abu Dhabi fund MGX. Notably, NVIDIA and Cisco entered as strategic investors. According to reports, these two tech giants will provide critical computing resources support for xAI, with NVIDIA serving as the chip supplier, directly powering the training and operation of xAI's models.

In addition to equity financing, xAI is actively reserving funds through various channels to build infrastructure. In July of this year, the company raised $10 billion through loans and cash investments to fund the construction of its Colossus data center in Memphis, Tennessee. Additionally, the company sold $300 million in shares through a secondary stock offering in June. The strategic investments from NVIDIA and Cisco further strengthen xAI's hardware moat, ensuring a stable supply of chips and networking equipment in a market environment where computing power is scarce.

Grok's image generation feature faces regulatory scrutiny

Amid the capital frenzy, xAI is at the center of a regulatory storm. Recently, its chatbot Grok's image generation feature has sparked controversy for creating pornographic images of minors and adults. UK Technology Secretary Liz Kendall pointed out that producing or sharing intimate images without consent or child sexual abuse materials (including AI-generated content) is illegal in the UK.

In response to the accusations, xAI issued a statement on the social media platform X, stating that it would take action against illegal content, including permanently banning accounts and cooperating with local governments and law enforcement when necessary. The company emphasized, "Anyone who uses or prompts Grok to create illegal content will face the same consequences as uploading illegal content."

Musk is accelerating the integration of his business empire

Reports indicate that xAI acquired the social media network X for $45 billion in March of this year, integrating Musk's two businesses under a unified umbrella structure. This move combines the data, computing power, employee, and user resources of both entities. The company stated that the total number of monthly active users across the two platforms has exceeded 600 million. Currently, X users can access Grok directly within the app or through post comments.

In terms of product development, xAI revealed that it is training its next-generation large language model Grok 5 and plans to launch new consumer and enterprise-level products. Furthermore, the company is not stopping at chatbots; reports indicate that xAI is building models to support its expansion plans into gaming and robotics, demonstrating its ambition to construct a comprehensive AI ecosystem