XAI (company)

Musk founded xAI on March 9, 2023.^[15][16] The company was founded with a team of eleven AI researchers, including Igor Babuschkin, formerly associated with Google DeepMind, as chief engineer.^{[17][4][1][2][3]} Musk officially announced the formation of xAI on July 12, 2023.^[18]

As of July 2023, xAI was headquartered in the San Francisco Bay Area.^[19] It was initially incorporated in Nevada as a public-benefit corporation.^[20] By May 2024, it had dropped the public-benefit status.^[21]

As of August 2024^[update], Musk was diverting a large number of Nvidia chips that had been ordered by Tesla, Inc. to X and xAI.^[22] On December 23, 2024, xAI raised an additional $6 billion in a private funding round supported by Fidelity, BlackRock, Sequoia Capital, among others, making its total funding to date over $12 billion.^[23] On February 10, 2025, xAI and other investors made an offer to acquire OpenAI for $97.4 billion.^[24] On March 17, 2025, xAI acquired Hotshot, a startup working on AI-powered video generation tools.^[25] On March 28, 2025, Musk announced that xAI acquired sister company X Corp., the developer of social media platform X (formerly known as Twitter), which was previously acquired by Musk in October 2022. The deal, an all-stock transaction, valued X at $33 billion, with a full valuation of $45 billion when factoring in $12 billion in debt. Meanwhile, xAI itself was valued at $80 billion. Both companies were combined into a single entity called X.AI Holdings Corp.^[26][27][28]

On July 14, 2025, United States Department of Defense announced that xAI had received a $200 million contract for AI in the military.^[29] On September 12, xAI laid off 500 data annotation workers. The division, previously the company's largest, had worked to train Grok, xAI's chatbot.^[30][31][32]

xAI purchased a third building on December 30, 2025 to increase its training capacity to nearly 2 gigawatts of compute power. Simultaneously, xAI announced plans to expand Colossus to house at least 1 million graphics processing units.^[33]

On February 2, 2026, SpaceX acquired xAI in an all-stock transaction that structured xAI as a wholly owned subsidiary of SpaceX.^[13][34] The acquisition valued SpaceX at $1 trillion and xAI at $250 billion, for a combined total of $1.25 trillion.^[35]

In February 2026, following the SpaceX acquisition, xAI laid off some employees as the company was restructured into four primary development teams.^[36] Around this time, half of the company's co-founders left.^[4][1][2][3] In March 2026, two more co-founders were pushed-out following an audit performed by SpaceX and Tesla, leaving only Musk and one other co-founder.^[37]

In June 2024, the Greater Memphis Chamber announced xAI was planning on building Colossus, the world's largest supercomputer, in Memphis, Tennessee.^[38] After a 122-day construction, the supercomputer went fully operational in December 2024. Local government in Memphis has voiced concerns regarding the increased usage of electricity, 150 megawatts of power at peak, and while the agreement with the city is being worked out, the company has deployed 14 VoltaGrid portable methane-gas powered generators.^[39] On November 26, 2025, xAI announced plans to build a solar farm near Colossus with an estimated output of 30 megawatts of electricity, which is 10% of the data center's estimated power use.^[40]

Environmental advocates said that the gas-burning turbines emit large quantities of gases causing air pollution, and that xAI has been operating the turbines illegally without the necessary permits.^[41][42] The New Yorker reported on May 6, 2025, that thermal-imaging equipment used by volunteers flying over the site showed at least 33 generators giving off heat, indicating that they were all running. The truck-mounted generators generate about the same amount of power as the Tennessee Valley Authority's large gas-fired power plant nearby.^[43] The Shelby County Health Department granted xAI an air permit for the project in July 2025.^[44]

According to Musk in July 2023, a politically correct AI would be "incredibly dangerous" and misleading, citing as an example the fictional HAL 9000 from the 1968 film 2001: A Space Odyssey. Musk instead said that xAI would be "maximally truth-seeking". Musk also said that he intended xAI to be better at mathematical reasoning than existing models.^[45] On November 4, 2023, xAI unveiled Grok, an AI chatbot that is integrated with X. xAI stated that when the bot is out of beta, it will only be available to X's Premium+ subscribers.^[46][47]

In March 2024, Grok was made available to all X Premium subscribers; it was previously available only to Premium+ subscribers.^[48][49] On March 17, 2024, xAI released Grok-1 as open source.^[50][51] On March 29, 2024, Grok-1.5 was announced, with "improved reasoning capabilities" and a context length of 128,000 tokens.^[52] On April 12, 2024, Grok-1.5 Vision (Grok-1.5V) was announced.^{[53][non-primary source needed]} On August 14, 2024, Grok-2 was made available to X Premium subscribers.^[54] It is the first Grok model with image generation capabilities.^[55]

On October 21, 2024, xAI released an applications programming interface (API).^[56] On December 9, 2024, xAI released a text-to-image model named Aurora.^[57] On February 17, 2025, xAI released Grok-3, which includes a reflection feature. xAI also introduced a websearch function called DeepSearch.^[58] In March 2025, xAI added an image editing feature to Grok, enabling users to upload a photo, describe the desired changes, and receive a modified version.^[59] Alongside this, xAI released DeeperSearch, an enhanced version of DeepSearch.^[60] On July 9, 2025, xAI unveiled Grok-4. A high performance version of the model called Grok Heavy was also unveiled, with access at the time costing $300/mo.^[61]

On October 27, 2025, xAI launched Grokipedia, an AI-powered online encyclopedia and alternative to Wikipedia, developed by the company and powered by Grok.^[62] Also in October, Musk announced that xAI had established a dedicated game studio to develop AI-driven video games, with plans to release a great AI-generated game before the end of 2026.^[63][64]

In November 2023, Musk stated that "X Corp investors will own 25% of xAI".^[65] In December 2023, in a filing with the United States Securities and Exchange Commission, xAI revealed that it had raised US$134.7 million in outside funding out of a total of up to $1 billion.^[66][67] After the earlier raise, Musk stated in December 2023 that xAI was not seeking any funding "right now".^[68] By May 2024, xAI was reportedly planning to raise another $6 billion of funding.^[69][70] Later that same month, the company secured the support of various venture capital firms, including Andreessen Horowitz, Lightspeed Venture Partners, Sequoia Capital and Tribe Capital.^[71][72]

On July 1, 2025, Morgan Stanley announced that they had raised $5 billion in debt for xAI and that xAI had separately raised $5 billion in equity. The debt consists of secured notes and term loans. Morgan Stanley took no stake in the debt.^[73][74] SpaceX, another Musk venture, was involved in the equity raise, agreeing to invest $2 billion in xAI.^[75]

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