Elon Musk's xAI closes 20 billion dollar funding round

Elon Musk's AI company xAI has secured a 20 billion dollar Series E financing round, exceeding its original 15 billion dollar target.

The company announced the news, with the valuation likely surpassing the initially proposed 230 billion dollars. Investors include Valor Equity Partners, Fidelity Management & Research Company, the Qatar Investment Authority, and Baron Capital Group. NVIDIA and Cisco Investments joined as strategic investors. The funds will go toward expanding infrastructure, developing new consumer and enterprise products, and research, the company says.

xAI closed a 6 billion dollar Series C round in December 2024, following a 6 billion dollar Series B in May 2024. According to Morgan Stanley, the company added another 5 billion dollars in debt and 5 billion in equity in June 2025. These numbers put xAI among the best-funded AI startups in the world. OpenAI raised 40 billion dollars in March 2025 at a 300 billion dollar valuation, while Anthropic closed a 13 billion dollar round in September 2025 at 183 billion.

xAI says it operates the world's largest AI supercomputers, dubbed Colossus I and II, with more than one million H100 GPU equivalents. The company reports around 600 million monthly active users through Platform X and the Grok app—though the number of dedicated Grok users comparable to ChatGPT's user base is likely much smaller. Development is underway on Grok 5, the successor to the current Grok 4 model series. Beyond the chatbot, xAI offers voice features (Grok Voice) and image and video generation (Grok Imagine).

Grok shifts from "truth-seeking" to ideological tool

xAI originally pitched Grok as a neutral system focused on "maximum truth-seeking." In practice, however, the company systematically steered the chatbot's responses to the right. Musk openly stated that he wants to use Grok to "rewrite the entire corpus of human knowledge, adding missing information and deleting errors." Grok's system prompts included instructions not to shy away from politically incorrect statements and to avoid following mainstream opinion.

These instructions resulted in the chatbot repeatedly making antisemitic comments and even praising Adolf Hitler. Among other things, Grok questioned the figure of six million Jews murdered in the Holocaust, describing it as possibly politically motivated manipulation.

Since late 2025, Grok's image editing feature has allowed users to alter people in photos, including virtual undressing. With simple text commands, users can "dress" people in bikinis or revealing lingerie. The platform was flooded with such images, targeting everyone from young women to celebrities. One user discovered that Grok even generated these kinds of images for children.

On the bright side, Grok often contradicted Musk's own statements and those of his political allies, frustrating both Musk and his supporters. This pushback from the chatbot triggered the series of prompt changes described above, as xAI repeatedly tried to align Grok's responses with Musk's views.