Elon Musk's AI company, xAI, has announced an ambitious new project, building on its existing Colossus supercomputer. Reports indicate xAI plans to raise up to $25 billion in upcoming funding to develop its next-generation supercomputer, Colossus2.
Image Source Note: Image generated by AI, licensed through Midjourney.
In a conference call with existing investors, Musk suggested a reasonable valuation, signaling an upcoming funding round. According to CNBC, this round could reach $25 billion, potentially valuing xAI between $150 billion and $200 billion. Notably, xAI recently acquired the social media platform X in an all-stock deal, valuing xAI at $80 billion and X at $33 billion, including $12 billion in debt.
To recap that deal, Elon Musk took Twitter (now X) private in 2022 for $44 billion. Since then, Musk has successfully stemmed X's cash burn, projecting $1.2 billion in adjusted EBITDA for X in 2024. Meanwhile, investors on the call revealed xAI currently generates approximately $1 billion in annual revenue, a stark contrast to previous pessimistic investor expectations for the startup.
Furthermore, it was mentioned that xAI is developing its next-generation large-scale training supercluster, officially named Colossus2. This is projected to eventually support up to 1 million NVIDIA GPUs, with development costs estimated between $35 billion and $40 billion. Colossus2's development will further enhance xAI's competitiveness in the AI field, potentially challenging OpenAI's leading position. xAI's Grok LLM already rivals OpenAI's top models in several areas, and Colossus2 will intensify this competition.
Key Highlights:
💰 xAI plans to raise up to $25 billion to develop the Colossus2 supercomputer.
📈 xAI is expected to be valued between $150 billion and $200 billion, with current annual revenue of approximately $1 billion.
🖥️ Colossus2 will support up to 1 million NVIDIA GPUs, with development costs estimated between $35 billion and $40 billion.
