Elon Musk’s xAI Raises $10 Billion as AI Competition Grows
xAI secures $10 billion in new funding, combining debt and equity, to fuel its AI ambitions.
Elon Musk’s AI startup, xAI, has raised $10 billion in a mix of debt and equity, according to a report from CNBC.
The funding includes a $5 billion strategic equity investment, arranged by Morgan Stanley. The rest came from term loans and secured notes.
This latest round follows xAI’s $6 billion Series C funding just over six months ago, which valued the company at $50 billion. Investors in that round included major firms like Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity, and Kingdom Holding Co. Another $6 billion was raised in a May 2024 Series B round, valuing the company at $24 billion.
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xAI hasn’t disclosed its current valuation after this new $10 billion raise. However, the fresh capital gives it more resources to grow Grok, its AI chatbot built using data from Musk’s social platform, X. xAI acquired X in March. At the time, xAI was reportedly valued at $80 billion, while X was valued at $33 billion.
The AI industry is growing fast, with strong competition. xAI goes head-to-head with companies like OpenAI, Anthropic, and Mistral AI. In March, OpenAI raised $40 billion, pushing its valuation to $300 billion—one of the largest private funding rounds ever. Around the same time, Anthropic was valued at $61.5 billion after securing $3.5 billion in Series E funding.
With this latest funding, xAI is firmly positioned to compete in the rapidly expanding AI space.