Chip-making giant Nvidia is in talks with Elon Musk about investing in his fast-growing artificial intelligence startup xAI, a source familiar with the situation said.
XAI – which powers the sarcastic Grok chatbot on Musk’s X social network – is in talks with some investors about raising several billion dollars. Valuation of approximately $40 billionThe WSJ reported this week.
It was reported that he was talking strategic investor – Implied technology companies as opposed to investment firms – but gave no names.
Venture firms including Sequoia Capital, Andreessen Horowitz and VY Capital have been involved in the latest funding talks, the tech news site reports.
Nvidia – which took over last week under CEO Jensen Huang Overtook Apple to become the world’s most valuable company With a market capitalization of more than $3.5 trillion – it declined to comment when contacted by the Post.
The company strongly denied similar rumors in the spring.
Musk is hoping to raise a large new fund-raising round in January, which could value xAI at up to $75 billion, two of the sources said.
According to industry insiders, it is not unusual for chip makers like Nvidia to co-invest with their customers on projects.
An Nvidia analyst speaking on condition of anonymity said that XAI’s competitors would still buy Nvidia’s chips even if it invested in XAI.
“If not, this transaction will never move forward,” the analyst said.
one in December 2023 Blog PostNvidia said it invested in more than two dozen companies last year as the pace of innovation in AI and accelerated computing accelerates.
“Nvidia’s corporate investment arm is focused on strategic collaboration,” Nvidia said in a blog post. “These partnerships encourage joint innovation, enhance the Nvidia platform, and expand the ecosystem.”
Some insiders say that given Musk’s extensive collaboration with Nvidia across his business empire, an XAI-Nvidia partnership would be a natural fit.
In the podcast of October 17Huang praised Musk for building the fastest supercomputer on the planet with the help of his company in 19 days.
In April, Nvidia’s stock soared when Musk said Tesla would need access to Nvidia’s more high-end chips to power the electric car maker’s AI plans. Baron reported,
musk also said in April xAI will need 100,000 Nvidia H100 chips to train advanced versions of its chatbot “Grok 3.”
The current version, Grok 2, took about 20,000 chips.
Musk was also quoted in an Nvidia press release following the release of the advanced Blackwell AI chips.
“There is currently nothing better than Nvidia hardware for AI,” Musk said in the release.
Musk’s xAI is a direct competitor to Google’s Gemini AI platform and OpenAI-backed ChatGPT.
