According to CNBC’s David Faber, Elon Musk’s artificial intelligence company xAI is raising up to $6 billion at a $50 billion valuation. Faber reported that the funding, expected to close early next week, is a combination of $5 billion from sovereign funds in the Middle East and $1 billion from other investors.

The funding will likely be used by xAI to acquire 100,000 Nvidia chips, sources familiar with the situation told Faber. This is expected to support the company’s AI research and development efforts.

xAI, founded by Elon Musk in July 2023, aims to “understand the true nature of the universe,” according to the startup’s website. In November 2023, the company released a chatbot called Grok, which it claimed was modeled after “The Hitchhiker’s Guide to the Galaxy” and had real-time knowledge of the internet.

With Grok, xAI is seeking to compete with other prominent AI chatbots like OpenAI’s ChatGPT, Google’s Bard, and Anthropic’s Claude. Musk previously co-founded OpenAI but left in 2018 due to a conflict with co-founder Sam Altman.

Now that Donald Trump has been elected president, Musk is reportedly beginning to actively work with the new administration on its approach to AI and tech more broadly, as part of Trump’s inner circle in recent weeks.