Nvidia (NASDAQ:NVDA) stock saw a surge at the open of trading on Tuesday, buoyed by news that Elon Musk's artificial intelligence company, xAI, has secured $6 billion in funding to compete with OpenAI.
The Series B funding, revealed in an online post on May 26, comes less than a year after xAI was introduced and represents a major commitment to the burgeoning field of artificial intelligence development.
Elon Musk, who previously supported AI and contributed to OpenAI before the release of ChatGPT in late 2022, later withdrew his support for the project, expressing concerns about the potential risks of the technology. Over the past year, he has joined other executives in proposing a temporary halt to AI development.
In November, Musk introduced Grok, a competitor to OpenAI’s ChatGPT that was programmed using and integrated into X.com, the online platform formerly known as Twitter. Grok is now the most prominent output of the xAI effort, which is overseen by executives with past roles at DeepMind, Microsoft (NASDAQ:MSFT) and Alphabet (GOOGL)’s Tesla (NASDAQ:TSLA).
The newly acquired capital will be allocated to launch xAI's initial products, build sophisticated infrastructure, and accelerate the creation of upcoming technologies, as mentioned in the online article.
The Information recently reported that xAI plans to build a scale-up supercomputer to support an advanced version of Grok. Musk told investors that he plans to have the supercomputer up and running by fall 2025, according to the report.
The initiative could include a partnership with Oracle (ORCL) to create a powerful computer. When completed, the networked clusters of Nvidia’s flagship H100 graphics processing units (GPUs) will be at least four times larger than the largest GPU clusters currently available, according to the publication, which referred to Musk’s investor briefing in May.
Source: Investing
