Updated December 25, 12:21 p.m. Pacific: Added details of xAIs valuation and Kingdom Holdings contribution.xAI, Elon Musks AI company, has raised $6 billion in a Series C financing round.The company announced this week that Andreessen Horowitz , Blackrock, Fidelity, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, Vy Capital, Nvidia, AMD, and others participated.Kingdom Holdings, the Saudipublic filing. The filing also revealed that xAI is now valued at $45 billion, close to double its previous valuation.The new cash brings xAIs total raised to $12 billion, adding to the $6 billion tranche xAI raised in May. According to the Financial Times, only investors whod backed xAI in its previous fundraising round were permitted to participate in this one. Reportedly, investors who helped finance Musks Twitter acquisition were given access to up to 25% of xAIs shares.xAIs most powerful model yet is currently training and we are now focused on launching innovative new consumer and enterprise products, xAI said in a statement. The funds from this financing round will be used to further accelerate our advanced infrastructure, ship groundbreaking products and accelerate research and development.Ramping up AIMusk formed xAI last year. Soon after, the company releasedGrok, a flagship generative AI model that now powers a number of features on X, including a chatbot accessible to X Premium subscribers and free users in some regions.Grok has what Musk has described as a rebellious streak a willingness to answer spicy questions that are rejected by most other AI systems. Told to be vulgar, for example, Grok will happily oblige, spewing profanities and colorful language you wont hear fromChatGPT.Musk has derided ChatGPT and other AI systems for being too woke and politically correct, despite Groks own unwillingness to cross certain boundaries and hedge on political subjects. Hes also referred to Grok as maximally truth-seeking and less biased than competing models, although theres evidence to suggest that Grok leans to the left.Over the past year, Grok has become increasingly ingrained in X, the social network formerly known as Twitter. At launch, Grok was only available to X users and developers skilled enough to get the open source edition up and running.Thanks to anintegrationwith xAIs in-house image generation model, Aurora, Grok can generate images on X (without guardrails, controversially). The model can analyze images as well, and summarize news and trending events imperfectly, mind.Reports indicate that Grok mayhandle even more X functions in the future, from enhancingXs search capabilities andaccount bios to helping with post analytics and reply settings. X recently got a Grok button designed to help users discover relevant context and dive deeper into trending discussions and real-time events.xAI is sprinting to catch up to formidable competitors like OpenAI and Anthropic in the generative AI race. The company launched an API in October, allowing customers to build Grok into third-party apps, platforms, and services. And it just rolled out a standalone Grok iOS app to a test audience.Musk asserts that it hasnt been a fair fight.In a lawsuit filed against OpenAI and Microsoft, OpenAIs close collaborator, attorneys for Musk accuse OpenAI of actively trying to eliminate competitors like xAI by extracting promises from investorsnot to fund them. OpenAI, Musks counsel says, also unfairly benefits from Microsofts infrastructure and expertise in what the attorneys describe as a de facto merger.Yet Musk often says that Xs data gives xAI a leg up compared to rivals. Last month, Xchangedits privacy policy to allow third parties, including xAI, to train models on X posts.Musk, its worth noting, was one of the original founders of OpenAI, and left the company in 2018 after disagreements over its direction. Hes argued in previous suits that OpenAI profited from his early involvement yet reneged on its nonprofit pledge to make the fruits of its AI research available to all.OpenAI, unsurprisingly, disagrees with Musks interpretation of events. In a mid-December press release, the company characterized Musks lawsuit as misleading, baseless, and a case of sour grapes.An xAI ecosystemxAI has outlined a vision according to which its models would be trained on data from Musks various companies, including Tesla and SpaceX, and the models could then improve technology across those companies. xAI is already powering customer support for SpaceXs Starlink internet service, according to The Wall Street Journal, and the startup is said to be in talks with Tesla to provide R&D in exchange for some of the carmakers revenue.Tesla shareholders, for one, object to these plans. Several have sued Muskover his decision to start xAI, arguing that Musk hasdiverted both talent and resourcesfrom Tesla to whats essentially a competing venture.Nevertheless, the deals and xAIs developer and consumer-facing products have driven xAIs revenue to around $100 million a year. For comparison, Anthropic is reportedly on pace to generate $1 billion in revenue this year, and OpenAI is targeting $4 billion by the end of 2024.Musk said this summer that xAI is training the next generation of Grok models at its Memphis data center, which was apparently built in just 122 days and is currently powered partly by portable diesel generators. The company hopes to upgrade the server farm, which contains 100,000 Nvidia GPUs, next year; in a press release, xAI said it plans to fully double that number. (Because of their ability to perform many calculations in parallel, GPUs are the favored chips for training and running models.)In November, xAI won approval from the regional power authority in Memphis for 150MW of additional power enough to power roughly 100,000 homes. To win the agency over, xAI pledged to improve the quality of the citys drinking water and provide the Memphis grid with discounted Tesla-manufactured batteries. But some residents criticized the move, arguing it would strain the grid and worsen the areas air quality.Tesla is also expected to use the upgraded data center to improve its autonomous driving technologies.xAI has expanded quite rapidly from an operations standpoint in the year since its founding, growing from just a dozen employees in March 2023 to over 100 today. In October, the startup moved into OpenAIs old corporate offices in San Franciscos Mission neighborhood.xAI has reportedly told investors it plans to raise more money next year.It wont be the only AI lab raising immense cash. Anthropic recently secured $4 billion from Amazon, bringing its total raised to $13.7 billion, while OpenAI raised $6.6 billion in October to grow its war chest to $17.9 billion.Megadeals like OpenAIs and Anthropics drove AI venture capital activity to $31.1 billion across over 2,000 deals in Q3 2024, per PitchBook data.TechCrunch has an AI-focused newsletter!Sign up hereto get it in your inbox every Wednesday.