Nvidia Stock Soars as xAI Raises Billions in a Funding Round

On Tuesday, Nvidia Corp.’s shares surged after Elon Musk revealed that his artificial intelligence (AI) startup xAI raised $6.00 billion.

The Silicon Valley firm’s stock advanced 6.98% to $1,139.01 apiece on May 28, closing beyond $1,100.00 for the first time. Moreover, it added 0.96% after hours, with analysts projecting a 2.43% climb to $1,063.20 per share in the coming session.

Over the weekend, Musk announced plans to build the largest supercomputer to run the Grok generative AI (GenAI) chatbot. The Tesla CEO said he intends to use 100,000 Nvidia H100 GPUs to train the Grok 3 large language model.

According to industry watchers, aggressive AI investments continued to fuel optimism over the semiconductor firm’s growth rate. In last week’s earnings call, it boasted annualized hikes of 461.47% for earnings per share and 262.17% for revenue.

Nvidia CEO Jensen Huang reassured stakeholders that the company’s Q1 data proved its resistance to future AI demand slowdown. He emphasized that the brand remains unrivaled in GenAI-optimized semiconductors, ensuring ample market for its GPUs and AI chips.

Huang added that investors can expect another boost to Nvidia once Musk’s supercomputer gets up and running by fall 2025. It will add to the company’s data center revenue, which already accounted for 87.00% of total revenue in Q1.

xAI Plans Three-Way Team-Up with Nvidia and Oracle

Earlier this month, xAI stated that its Gigafactory of Computing project would utilize Nvidia semiconductors and Oracle AI servers. In addition, insiders claimed that Musk is close to concluding a $10.00 billion deal with the Texas-based software company.

Furthermore, Oracle Chairman Larry Ellison told investors late last year that the software maker conducted small-scale LLM training for Grok. However, the severe lack of high-end GPUs prevented the two tech companies from finalizing a long-term agreement.

By adding Nvidia into the mix, xAI and Oracle can ensure a steady supply of semiconductors to accelerate GenAI development. However, tech specialists expressed doubts about whether the GPU maker would agree to grant special treatment to the two collaborators.

User Review
0 (0 votes)


Leave a Reply