Elon Musk’s xAI Closes In on Massive $15 Billion Funding Deal

TLDR

• Elon Musk’s xAI is in advanced talks to raise $15 billion at a $230 billion valuation, one of the largest AI funding rounds ever.
• The valuation has doubled from $113 billion in March 2025, reflecting the company’s shift toward AI infrastructure rather than just software.
• xAI is burning cash rapidly to train its Grok chatbot and build data centers, including the Colossus supercomputer in Memphis, Tennessee.
• Musk has proposed Tesla invest in xAI, but Tesla Chair Robyn Denholm questioned the move due to lack of board due diligence.
• Key executives have left both X and xAI recently, including Linda Yaccarino and chief financial officers from both companies.

Elon Musk’s artificial intelligence startup xAI is in advanced discussions to raise $15 billion in new funding. The Wall Street Journal reported the company is seeking a valuation of $230 billion in this funding round.

This represents a sharp increase from the $113 billion valuation xAI received after acquiring X in March 2025. Musk recently denied a CNBC report claiming xAI had already raised $15 billion at a $200 billion valuation.

Jared Birchall, Musk’s wealth manager, reportedly shared the fundraising details with potential investors. The report did not clarify whether the $230 billion figure is a pre-money or post-money valuation.

The funding round would rank among the largest in the AI sector. The company is directing capital toward physical infrastructure rather than software development alone.

xAI raised $10 billion in June 2025, split between $5 billion in equity and $5 billion in debt. Those funds were earmarked specifically for the Colossus data center in Memphis, Tennessee.

Infrastructure Investment Strategy

The company is building AI infrastructure to compete with OpenAI’s ChatGPT and Anthropic’s Claude. xAI’s flagship product is the Grok chatbot, which requires massive computing power for training and refinement.

SpaceX has provided $2 billion in financing to xAI. This cross-company investment creates alignment between Musk’s various business ventures.

Musk has publicly supported the idea of Tesla investing in xAI. He raised the proposal at a recent shareholder meeting.

Tesla Chair Robyn Denholm expressed concerns about this potential investment. She questioned the strategic rationale and noted the board had not conducted proper due diligence.

Leadership Changes and Cash Burn

Several key executives have recently departed from both X and xAI. Linda Yaccarino left X, while chief financial officers from both entities also exited.

Like other AI startups, xAI is spending heavily on infrastructure and model training. The company needs continuous fundraising to support its operations.

xAI is expanding its data center operations to train more advanced AI models. The company acquired property in Memphis for the Colossus supercomputer project.

The funding strategy positions xAI as an infrastructure company. This approach differs from competitors focused primarily on software and model licensing.

The new valuation would establish xAI as one of the highest-valued private AI companies. Competition in the AI sector continues to intensify among major players.

Musk controls xAI alongside his other companies including Tesla, SpaceX, and X. The interconnected nature of these businesses creates potential synergies in AI development and deployment.

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