xAI
2023
Jesse Coors-Blankenship
Co-founder, General Partner
Gregg Hill
Co-founder, General Partner
Brian Hoyt
Chief Operations Officer
xAI builds Grok, a general-purpose AI assistant, and Colossus, the Memphis supercomputer that trains it. The company's bet from the beginning was that frontier AI would be won on compute as much as on research, and it has invested accordingly: Colossus came online as one of the largest training clusters ever assembled, and Grok now reaches a very large audience through X, through Tesla vehicles, and through its own applications.
We joined xAI's first large-scale fundraising in 2024, when the company was valued at $24 billion. By its Series E in January 2026, that figure had reached roughly $230 billion.
2023
Founded by Elon Musk. Grok-0 released.
2025
Colossus goes live in Memphis.
2026
SpaceX acquires xAI.
2024
$6B Series B at a $24B post-money valuation. Parkway invests.
2026
$20B Series E at a valuation of roughly $230B.
When Elon Musk announced the launch of xAI and its large language model (LLM) Grok, Parkway joined in the first large-scale fundraising because we believe that xAI offers roughly the same features but a very different value proposition for investors.
The LLM market has become crowded, and over-valued, with too many “me too” products, which would inevitably lead to commoditization of the sector.
Musk was one of the founders of OpenAI (and also named the company), so he is very familiar with this technology. As a result, xAI offers similar functionality but a very different investment opportunity.
xAI released the weights for Grok-1 in 2024, and has kept a more open posture than most of its peers. Grok also has a ready-made source of both information and of customers via Elon Musk’s many companies. Grok will be able to train on data from X (Twitter), Tesla, SpaceX, Neuralink, and other Musk companies. Likewise, Grok will be deployed in Tesla motor vehicles, it will be used to interface with Tesla’s humanoid robot (Optimus) and it is already deployed to X and available to premium users.
AI will probably be smarter than any single human next year. By 2029, AI is probably smarter than all humans combined.
Elon Musk
Finally, and perhaps most importantly, AI is placing enormous pressure on internet infrastructure. So xAI is directing much of the $6 billion raised in its Series B into building the largest data centre in the world. Colossus, the Memphis cluster built to train and serve Grok, is now operational and among the largest AI training facilities anywhere. It is the clearest expression of xAI's core wager: that the company with the most compute will iterate fastest, and that the gap compounds.
This new data center will allow xAI to scale much more rapidly than all the other LLMs, because it will have massively more compute power on which to both train and deploy Grok. As a result, Parkway believes xAI will quickly surpass all its competitors in terms of performance, and be valued far in excess of its competitors.
