xAI closed a $6 billion Series B funding round on January 23, 2026, drawing investments from Saudi Arabia's Public Investment Fund, Andreessen Horowitz, Sequoia Capital, and Fidelity Management. The capital brings the company's total raised to $12 billion since its founding in July 2023. Elon Musk confirmed the deal on X, stating the money will build the world's smartest AI.
Grok 4 debuted the same day in Memphis, Tennessee, at xAI's Colossus supercomputer facility. The model promises superior reasoning, coding, and real-world problem-solving over rivals like OpenAI's GPT-5 and Google's Gemini 2. Musk demonstrated it solving complex physics problems and generating accurate code in under 10 seconds during a live stream viewed by 2.5 million people.
Investors cited xAI's rapid progress as key to the round. Saudi PIF committed $2 billion alone, viewing the firm as a hedge against U.S. tech dominance by Western giants. Andreessen Horowitz partner Martin Casado called Grok 4 a game-changer for enterprise AI in logistics and manufacturing.
The funding arrives as xAI expands its data centers. The company broke ground on a second facility in Austin, Texas, last week, housing 100,000 Nvidia H100 GPUs. Operations chief Jimmy Ba said production ramps up in Q2 2026 to meet demand from Tesla and SpaceX integrations.
xAI stock, traded privately, jumped 25% post-announcement. Employees received equity grants worth millions for early staff. Musk emphasized truth-seeking AI free from corporate censorship as the edge over competitors.
Critics questioned Saudi involvement given U.S. export controls on advanced chips. Commerce Secretary Howard Lutnick assured compliance during a January 24 briefing in Washington, D.C. xAI plans Grok 4 enterprise rollout by March 2026 at $20 per user monthly.