Recently, an official announcement from xAI has sent shockwaves through the global tech community: the Series E funding round has successfully secured a staggering $20 billion, significantly surpassing the original target of $15 billion. This influx of capital has catapulted the company's valuation to approximately $230 billion, effectively doubling its valuation from March 2025.

Among the list of strategic investors, NVIDIA and Cisco emerge as prominent names. Additionally, top-tier global capital is flocking to xAI, with investors such as Valor Equity Partners, Fidelity Investments, the Qatar Investment Authority, and the Abu Dhabi-based fund MGX joining the fray.

Musk's fervor for computing power verges on the extreme. xAI operates a supercomputer cluster dubbed 'Colossus' in Memphis, Tennessee, USA, which the company proudly claims to be one of the largest in the world.

According to official data, by the end of 2025, its Colossus I and II supercomputing centers will have deployed over a million GPUs equivalent to H100 models.

However, this level of computing power is not sufficient for Musk's ambitions. Just last December, he announced that xAI had acquired a third building, with the aim of scaling up model training capabilities to a computational scale approaching 2 gigawatts.

Both the new data center and the 'Colossus 2' project are strategically located adjacent to xAI's locally constructed natural gas power plants and other energy facilities. This ensures a reliable energy supply for the high-density computing power operations.

This asset-heavy, high-computing-power, and tightly integrated development path starkly contrasts with OpenAI's reliance on cloud providers for computing power collaboration.

Behind the capital frenzy, xAI is confronting increasingly severe regulatory challenges. Recently, its chatbot Grok's image generation feature has sparked controversy due to its creation of pornographic images involving minors and adults.

The Indian government has officially directed X Corp to prevent Grok from generating obscene and pornographic content and to submit a compliance report within 72 hours.

In a more complex legal battle, xAI recently filed a lawsuit against the California Attorney General, challenging a new law that mandates developers of generative AI to disclose detailed information about their training datasets.

xAI contends that this law compromises trade secrets and effectively provides competitors with a blueprint to understand how the company develops and trains its proprietary AI models.

Musk's business empire is undergoing accelerated integration. In March 2025, xAI acquired the social platform X for $45 billion. This strategic move combines the data, computing power, employee, and user resources of both entities.

Currently, xAI reaches approximately 600 million monthly active users through X and the Grok app.

Musk assured employees that as long as the company can navigate the next two to three years, xAI will outperform its competitors. He even predicts that xAI could achieve artificial general intelligence within the next few years, possibly as early as 2026.

xAI is not content with just chatbots. According to reports, the company is developing models to support its expansion into gaming and robotics, showcasing its ambition to build a comprehensive AI ecosystem. Globally, xAI's burn rate of $1 billion per month has left peers astounded, with its training data centers consuming electricity comparable to that of a small city.

Meanwhile, global regulators are intensifying their investigations into Grok's generation of inappropriate content. From India to the EU, and from the UK to California, legal challenges are mounting.

This is no longer just a technological race but a multidimensional game involving capital, policy, and ethics.

References:

https://finance.sina.cn/tech/2026-01-07/detail-inhfnemx2254915.d.html?fromtech=1&vt=4&wm=/index/nav?vt

https://www.chaincatcher.com/en/article/2235232

https://natlawreview.com/article/unmaking-grok-elon-musks-xai-sues-california-attorney-general-over-ai-training?amp