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Elon Musk’s xAI is preparing to raise more money from investors in a deal that could value the artificial intelligence company as high as $200bn — 10 times its value early last year, according to people close to the talks.
The fundraising, which is being discussed and could start formally next month, would be its third large share sale in less than two months. It raised $10bn through loans and cash investments in July, and in June sold $300mn of shares in a secondary stock offering.
A deal would also cement a rapid rise in xAI’s valuation from the $18bn set in its “series B” fundraising in May 2024.
The company this week released the fourth model of its Grok chatbot, which posts on Musk’s social media platform X — days after the bot repeatedly praised Adolf Hitler and shared antisemitic rhetoric on the platform. The company pledged to ban hate speech from its posts.
Three people close to the process said the new fundraising would target a valuation of between $170bn and $200bn. They cautioned the talks were preliminary and the details could change.
Saudi Arabia’s sovereign wealth fund, PIF, is expected to play a large role in the deal, two of the people said. PIF holds an indirect interest in xAI through its stake in Kingdom Holdings Company, which has invested $800mn in xAI.
xAI did not respond to requests for comment. PIF declined to comment.
xAI acquired X in March in an all-stock deal for $45bn. The transaction valued the combined company at $113bn. That would grow to about $245bn if the latest xAI fundraising is successful.
Another Musk company, SpaceX, has surged in value recently. The rocket and satellite group is preparing to sell about $1bn of its shares in a deal that would value it at $400bn, the Financial Times reported this week.
Musk’s companies — including Tesla and brain chip company Neuralink — initially benefited from the entrepreneur’s connections to US President Donald Trump following November’s election.
Musk was one of Trump’s biggest backers, spending more than $250mn on his campaign, but a public spat last month has led to concern about blowback on some of his businesses.
The value of his private companies suggests investors are looking past the risks of Trump targeting Musk’s businesses. However, shares in Tesla have fallen nearly a fifth since the start of the year.
xAI launched in 2023 shortly after OpenAI released its chatbot ChatGPT, which exploded in popularity. Musk was a co-founder of OpenAI in 2015 but he left in 2018, and has since been a vocal critic of the company and its chief executive Sam Altman. OpenAI was valued at $300bn as part of a fundraising earlier this year.
Additional reporting by Hannah Murphy
