xAI recently managed to raise $6 billion to develop and expand the Colossus supercomputing environment. This supercomputer should be in operation before the end of 2025.
In the new round of investment, $6 billion was raised on a market value of up to $50 billion. As much as $5 billion of the raised capital was raised by Middle East investment funds (sovereign wealth). The rest of $1 billion was raised by other investors.
A round of investment earlier in May of this year had also raised $ 6 billion. Then, at a market value of $24 billion
Expanding the Colossus AI environment
With the investments, Elon Musk’s AI company aims to develop and expand its supercomputing facility. Eventually, this location will house a supercomputing environment of at least 1 million GPUs. With its supercomputing environment, xAI is building an advanced AI system that it says is more powerful than current AI capabilities.
In September of this year, the Colossus AI environment was realized for this purpose, running on 100,000 Nvidia H100 GPUs. This super environment is to be expanded by another 100,000 GPUs, according to the owner Musk.
The price of GPU can be a bottleneck
The question is, however, whether xAI can really afford the necessary Nvidia H100 GPUs with the raised capital. Although it is likely that the AI specialist will get a good discount, the H100 GPUs cost $25,000 each. This brings the price of the requested 100,000 GPUs to $20 billion, which is more than the amount of the recently raised investment of $6 billion.
Also read: Musk said he is working on the xAI supercomputer by the end of 2025
