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Elon Musk’s xAI has raised more than $11 billion in record time

The tangled web of AI startups and their investors is throwing up conflicts — some old, some new.

12/4/24 11:03AM

Elon Musk making the news is almost routine post-election, but, even for Elon, this week’s headlines are full of some staggering figures: His $100+ billion Tesla pay package was struck down, SpaceX is reportedly nearing a $350 billion valuation, and his feud with OpenAI — the nonprofit he co-founded — has escalated, again.

Forsaking all others

Last Friday, Musk filed an injunction to halt OpenAI’s for-profit transition, accusing it of orchestrating a “group boycott” that blocked funding for his own AI venture, xAI. In October, the Financial Times reported that OpenAI had discouraged investors from backing rival AI startups during its latest funding round.

But, even if Sam Altman and co. have been forcing investors to commit to monogamy and invest only in OpenAI, you wouldn’t exactly say xAI has struggled to find backers.

In just 16 months since its July 2023 launch, xAI has raised ~$11 billion — a milestone that took OpenAI around eight years and the Amazon-backed Anthropic nearly four years to achieve. Indeed, xAI’s latest funding round catapulted its valuation to $50 billion, according to the Wall Street Journal. That surpasses Anthropic’s $19 billion valuation and the valuations of public heavyweights like Ford ($43 billion), Kroger ($43 billion), and Lululemon ($42 billion). It’s also more than the $44 billion Musk paid for X just two years ago.

Why the scramble for cash?

In 2024, if you want to compete in AI, you need to be willing to pour billions into physical stuff — AI chips and data centers: xAI’s latest $5 billion will partially fund the purchase of 100,000 Nvidia chips for its recently completed data center in Memphis. Meanwhile, Anthropic is on track to build one of the world's largest AI supercomputers, and OpenAI is expanding its footprint across the US Midwest and Southwest.

According to McKinsey & Company’s October research, demand for AI-specific data centers is projected to grow 33% annually through 2030, and could eventually account for 70% of global data center demand. TL;DR: AI is an expensive game, and xAI is leaning hard on Musk’s name to compete.

Chris Stokel-Walker

Bot bias

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Companies are getting AI chatbots to smear their competitors

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Prediction markets have, predictably, been given a boost by the summer of sports

Major platforms like Kalshi and Polymarket have seen huge upticks in users of late, thanks in no small part to what’s felt like a recent sporting smorgasbord, with major competitions across hockey, basketball, and soccer soaking up fans’ time (and spending, clearly) at the outset of summer.

While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

2026 World Cup Reverses Seasonal Lull for Sports Betting Apps

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

South by Southwest Conference and Festivals

Gold Tesla Cybercabs are piling up, but they’re not picking up passengers yet

Low-volume production started in April. Now people are noticing them more and more in the wild.

Rani Molla6/15/26

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TAKING ACCOUNTS

6/15/26

Britain announces social media ban for under-16s starting early 2027

The UK government plans to use the same model for the restrictions as Australia — but how successful has that case study been so far?

UK Prime Minister Announces Under-16s Social Media Ban

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5