xAI by Elon Musk Seeks to Raise $25 Billion for Colossus 2 Supercomputer Project with 1 Million NVIDIA GPUs, Estimated Cost Over $35 Billion

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Elon Musk’s xAI Expands Its Ambitions

Elon Musk’s xAI has significantly expanded its capabilities by doubling the size of its Colossus supercomputer to a remarkable 200, 000 NVIDIA GPUs. As the company sets its sights on new horizons, it is gearing up for an ambitious funding round aimed at raising an impressive sum to finance its future projects.

Funding Round on the Horizon

In a recent call with current investors, Musk indicated that a proper valuation for xAI is forthcoming. The interpretation by CNBC’s Faber suggests that this implies a substantial funding round could be imminent, potentially reaching $25 billion, which could elevate xAI’s valuation to between $150 billion and $200 billion.

“We’re going to put a proper value on the company.”

xAI’s Acquisition of X

For context, xAI made headlines by acquiring the social media platform X in an all-stock transaction valued at $80 billion, while X was appraised at $33 billion, which included $12 billion in liabilities. This transaction offered a gross valuation of $45 billion for X, prior to accounting for its existing debts.

It’s noteworthy that Elon Musk took X private in 2022 with a $44 billion bid. Since that time, he has successfully staunched the company’s financial losses, leading to an adjusted EBITDA of $1.2 billion projected for 2024.

Revenue Surprises and Future Outlook

According to insights shared during the recent investor call, xAI is generating an estimated annual revenue of around $1 billion. This figure stands in sharp contrast to previous conservative estimates from investors, who initially did not expect any significant revenue generation this year.

NEWS: xAI is now embarking on building Colossus 2, its next AI supercomputer cluster that will be much bigger and more powerful than Colossus 1, which was already the biggest and most powerful supercomputer in the world with 200, 000 Nvidia GPUs.

Elon Musk said publicly two… pic.twitter.com/jmYxApzxrs

— Sawyer Merritt (@SawyerMerritt) April 21, 2025

Colossus 2: The Next Generation Supercomputer

Moving onto future ambitions, Faber notes that xAI is already in the development phase of a new supercluster named Colossus 2, which is expected to feature up to 1 million NVIDIA GPUs at an estimated cost of $35 billion to $40 billion. This ambitious project will not only enhance xAI’s existing capabilities but also position it as a formidable competitor to leading players like OpenAI.

The advancement of xAI’s Grok LLM shows its increasing competitiveness, already proving its relevance against cutting-edge AI models. The upcoming Colossus 2 has the potential to redefine the landscape of artificial intelligence.

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