Elon Musk’s $40k Chip Purchase for xAI Startup

MetaversePlanet May 29, 2024Last Updated: August 13, 2024

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Elon Musk is buying 100,000 chips for his new artificial intelligence startup, xAI. But what exactly will this huge investment be used for?

Elon Musk never stops. This time, he is purchasing 100,000 chips for his new AI startup, xAI. Musk announced that he had raised $6 billion in funding for xAI, which he founded last summer. So, what will this substantial budget be used for? Let’s take a detailed look at this exciting news.

Elon Musk buys 100,000 Nvidia-branded chips for artificial intelligence company xAI

The $6 billion raised will be used to bring xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies. So far, xAI has unveiled its chatbot, called Grok, which is being developed as a competitor to OpenAI’s ChatGPT. Currently, Grok is only available to X Premium subscribers.

Elon Musk's $40k Chip Purchase for xAI Startup

This funding round included major investors such as Andreessen Horowitz, Sequoia Capital, and Prince Al Waleed bin Talal of Saudi Arabia. Last year, xAI announced that it was seeking equity investments of up to $1 billion. However, a few months ago, The Financial Times reported that xAI was looking for $6 billion, which Musk denied at the time. And now we see that $6 billion has indeed been raised.

Developing artificial intelligence is not cheap. Nvidia’s upcoming Blackwell B200 AI graphics cards range from $30,000 to $40,000 each. According to a report last week, xAI will require 100,000 units of Nvidia’s existing H100 chips to support the upgraded version of the Grok AI chatbot. Musk told investors that they plan to launch the new data center in the fall of 2025.

The race for AI chips, talent, and technology has never been more competitive. Big tech giants like Google, Apple, Amazon, Microsoft, and Meta are spending billions of dollars on AI projects. Microsoft has formed a multibillion-dollar partnership with OpenAI. OpenAI CEO Sam Altman is seeking trillions of dollars to revamp the global chip industry. Musk, on the other hand, is suing OpenAI, claiming that it deviated from its mission to benefit humanity.

Elon Musk stated that he would prefer to develop products other than Tesla in artificial intelligence and robotics. Tesla shareholders will vote on reinstating Musk’s $56 billion salary package. The annual meeting will be held on June 13.

Let’s see what else awaits us in the world of artificial intelligence. We have to be ready, because Elon Musk is playing big again. What do you think? You can share your opinions in the comments section below.