Just after securing an $18 billion valuation in a new funding round, xAI is gearing up to spend at least 50 percent of its net worth on NVIDIA's GPUs, as per Elon Musk's latest comments.
For the benefit of those who might not be aware, xAI recently raised $6 billion in a new funding round that valued Elon Musk's AI-focused enterprise at $18 billion. While the chatbot Grok is xAI's only product at the moment, the startup intends to significantly expand its AI-related product portfolio by ramping up its investments in GPU clusters.
This is not accurate. Tesla would be second highest and X/xAI would be third if measured correctly.
— Elon Musk (@elonmusk) April 8, 2024
Back in April, the X account "The Technology Brother" posted that Mark Zuckerberg's Meta had amassed one of the largest stashes of the H100 GPUs in the world, amounting to around 350,000 units. Musk, however, took an exception with the rankings of Tesla and xAI in that tabulation, pointing out that "Tesla would be second highest and X/xAI would be third if measured correctly."
Given the pace of technology improvement, it’s not worth sinking 1GW of power into H100s.
The @xAI 100k H100 liquid-cooled training cluster will be online in a few months.
Next big step would probably be ~300k B200s with CX8 networking next summer.
— Elon Musk (@elonmusk) June 2, 2024
Today, we've received some solid projections from Elon Musk vis-a-vis xAI's oncoming chip buying frenzy. To wit, in response to an online poll, Elon Musk has announced that xAI's "next big step would probably be ~300k B200s with CX8 networking next summer."
Back in March, NVIDIA's CEO Jensen Huang revealed that the company's latest B200 GPUs would likely be priced at between $30,000 and $40,000. This means that xAI is about to spend a whopping $9 billion on acquiring around 300,000 units of the B200 GPU, assuming the company is able to negotiate a price point that is at the lowest end of Huang's stated range.
Interestingly, should xAI follow through on Elon Musk's ambitious plans, it would be investing at least half of its current valuation in buying NVIDIA's GPUs over the next few months!
Do note that NVIDIA's H100 chips are now about to cede the proverbial ground to the latest GB200 Grace Blackwell Superchip. The chip combines one Arms-based Grace CPU with two Blackwell B100 GPUs and can deploy an AI model with 27 trillion parameters. Moreover, the superchip is expected to be 30 times faster at tasks like serving up answers from chatbots.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
