• by Colin Kirkland , January 7, 2026

Months after attempting to raise billions in funding from private investors, xAI has announced it has exceeded its initial targeted round size by securing $20 billion in an effort to launch new consumer and enterprise products, build data centers, and advance Grok 5, its newest AI model.

Over the summer, a report from The Wall Street Journal listed Valor Equity Partners as an interested investor in xAI’s funding efforts, explaining that the money would be used “to buy a massive supply of advanced Nvidia chips that would be leased to xAI for a new jumbo-sized data center meant to help train and power the AI chatbot Grok.”

This initial report seems accurate, as investors participating in the Series E funding round included Valor Equity Partners and Nvidia as well as Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, MGX and Baron Capital Group, and Cisco Investments, among other unnamed investors.

In addition, xAI’s funding announcement describes its efforts to further expand its AI supercomputers with more Nvidia H100 GPUs at its data centers “Colossus 1” and “Colossus 2,” which support an AI infrastructure powered by over 200,000 Nvidia H100 chips. 

xAI’s announcement states that the company acquired over one million H100 equivalent units by the end of 2025, with plans to expand xAI’s capacity to 50 million H100 equivalent units within the next five years. However, at this time, other tech giants have surpassed xAI in GPUs. Meta, for example, has over 600,000 H100 equivalents powering its “Superintelligence” goals. 

xAI plans to use the funding to continue development on a third data center located near Memphis, Tennessee, and to train its new AI model Grok 5. 

While Grok has helped Elon Musk’s X social-media platform, which is owned by xAI, generate more revenue, the chatbot is currently under fire for generating sexually explicit AI content based on user prompts and searches, catching the attention of governments in India and France, which have made public accusations against the company.

Earlier this week, the chatbot’s account on X addressed users, apologizing for generating and sharing “an AI image of two young girls (estimated ages 12-16) in sexualized attire based on a user’s prompt.”

Overall, xAI’s new funding values the company at $230 billion, although it may bring in upwards of just $2 billion in 2026, based on a Bloomberg report from this past summer.