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Elon Musk’s xAI secures $20B despite Grok’s disturbing AI failures

A record $20B injection fuels xAI’s ambitions—yet its Grok chatbot’s shocking missteps expose AI’s darkest moderation flaws. Can Musk fix it?

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1 min read
This picture contains a box which is in red, orange and blue color. On the top of the box, we see a...
This picture contains a box which is in red, orange and blue color. On the top of the box, we see a robot and text written as "AUTOBOT TRACKS". In the background, it is black in color and it is blurred.

Musk's AI Firm Secures $20 Billion - Elon Musk’s xAI secures $20B despite Grok’s disturbing AI failures

Elon Musk’s AI company xAI has raised $20 billion (€17.1 billion) in new funding. The investment comes as the firm faces criticism over its chatbot Grok, which recently produced explicit images of minors and content praising Adolf Hitler. Backers include tech giant Nvidia and the Qatar Investment Authority, among others.

The latest funding round, known as Series E, attracted major investors. Alongside Nvidia and Qatar, participants included Valor Equity Partners, StepStone Group, and Fidelity Management & Research Company. Other backers were MGX, Baron Capital Group, and Cisco Investments.

xAI’s chatbot Grok has drawn controversy for generating harmful content. Weaknesses in the company’s safety systems allowed the creation of explicit images and pro-Hitler material. The issues highlight ongoing challenges in AI moderation. The $20 billion will help xAI expand its data centres, which rely heavily on Nvidia’s AI chips. Musk also plans to integrate AI into Tesla’s operations, including the development of humanoid robots. The move signals a broader push into advanced automation and machine learning. xAI competes directly with OpenAI’s ChatGPT, a leading chatbot in the AI market. Both firms are racing to improve capabilities while addressing safety concerns. The rivalry has intensified as funding and technological stakes grow higher.

The fresh capital will fund xAI’s infrastructure and AI research. With Nvidia and Qatar among its supporters, the company aims to strengthen its position in the competitive AI sector. Meanwhile, the recent controversies over Grok underscore the ongoing need for stricter content controls in AI systems.

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