TLDR
- Elon Musk’s xAI is close to securing $15 billion in funding at a $230 billion valuation, according to Wall Street Journal reports.
- The valuation marks a substantial jump from the $113 billion figure recorded in March 2025 after xAI’s acquisition of X.
- Funds will be used to expand AI infrastructure, including the Memphis-based Colossus supercomputer and development of the Grok chatbot.
- Musk has proposed Tesla invest in xAI, but the board chair questioned the plan due to insufficient due diligence.
- SpaceX previously provided $2 billion to xAI, establishing cross-company financial connections within Musk’s business empire.
Elon Musk’s artificial intelligence company xAI is in advanced discussions to raise $15 billion in new funding. The Wall Street Journal reports the company is pursuing a $230 billion valuation in this latest round.
The figure represents a sharp increase from xAI’s $113 billion valuation in March 2025. Musk recently disputed a CNBC report claiming the company had completed a $15 billion raise at a $200 billion valuation.
Jared Birchall, Musk’s personal wealth manager, shared the fundraising details with prospective investors. Reports did not clarify whether the valuation is calculated pre-money or post-money.
If completed, this would rank among the largest funding rounds in the artificial intelligence sector. The capital will primarily fund physical infrastructure rather than software development alone.
Infrastructure Expansion Plans
xAI raised $10 billion in June 2025 through a mix of equity and debt financing. Those funds were allocated specifically to build the Colossus data center in Memphis, Tennessee.
The company is developing infrastructure to compete with established AI leaders including OpenAI and Anthropic. xAI’s primary product is Grok, a chatbot requiring massive computational power for training and operation.
SpaceX has already invested $2 billion in xAI. This creates financial linkages across multiple companies controlled by Musk.
Musk has publicly suggested Tesla should invest in xAI. He brought up the proposal during a recent shareholder meeting.
Robyn Denholm, who chairs Tesla’s board, voiced concerns about the potential investment. She highlighted the lack of formal board review and questioned the strategic value for Tesla.
Spending and Executive Changes
xAI is spending heavily on infrastructure and model training like other AI startups. The company requires ongoing capital infusions to maintain its development pace.
The company is building out data center capacity to train more advanced artificial intelligence models. The Memphis location will host the Colossus supercomputer facility.
Multiple senior executives have departed from xAI and X in recent weeks. Linda Yaccarino left her position at X, while both companies lost their chief financial officers.
xAI’s strategy focuses on owning physical infrastructure rather than relying solely on cloud services. This approach aligns with investments made by tech giants like Google, Microsoft, and Amazon.
Competitive Landscape
The $230 billion valuation would establish xAI as one of the most valuable privately held AI companies. Funding competition in the artificial intelligence space remains intense.
xAI directly competes with OpenAI’s ChatGPT and Anthropic’s Claude. The company must scale infrastructure quickly to keep pace with competitors who have larger head starts.
Musk controls xAI alongside Tesla, SpaceX, X, and other ventures. The interconnected nature of these businesses creates potential for technology sharing and integration.
AI companies are collectively spending billions on computing infrastructure and model development. The race to build more capable systems is driving unprecedented capital requirements across the industry.
The funding terms are still being finalized with investors. Details could shift before any agreement is completed.
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