Elon Musk's xAI in advanced talks to raise $15 bn at $230 bn valuation

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Elon Musk’s artificial intelligence (AI) company xAI is close to raising $15 billion in new investment, which could value the company at $230 billion, according to a report by The Wall Street Journal. The latest fundraising would be a big jump from the $113 billion valuation xAI reported when it took over Musk’s social media platform X in March this year.

 

According to the report, the details of the fundraising were shared by Musk’s wealth manager, Jared Birchall, but it isn’t clear whether the valuation number is before or after the new funding comes in.

 

CNBC first reported the fundraising plan. After the report came out, Musk replied “false” to an X post referencing the article.

How has xAI raised funds earlier?

In June, xAI raised $10 billion, including $5 billion in equity and $5 billion in debt, mainly to build its large data centre called Colossus, located in Memphis, Tennessee. SpaceX, Musk’s rocket company, invested $2 billion in that round. 

 

Musk has said publicly that he supports the idea of Tesla investing in xAI as well. Tesla shareholders had mixed reactions to the idea. Currently, the decision is pending with the board.

 

According to the data from Traxcn, xAI has raised a total of $25 billion over 8 funding rounds, including three early-stage, three late-stage and two debt rounds.

How intense is the competition in the AI race?

Meanwhile, the AI investment race is accelerating across the industry. Microsoft and Nvidia on Tuesday announced a partnership that includes up to $15 billion invested in AI startup Anthropic. xAI competes directly with OpenAI's ChatGPT.

 

AI companies like xAI and Anthropic are spending extremely large amounts of money to build data centres and train advanced AI models. Because of the huge costs, many AI startups are constantly raising new funds. According to the report, experts expect trillions of dollars in AI spending in the coming years.