Elon Musk’s artificial intelligence startup, xAI, is preparing for a major fundraising round that could surpass $20 billion, according to Bloomberg. If successful, the new round would push xAI’s valuation beyond $120 billion, signaling a bold escalation in Musk’s ambitions to rival AI giants like OpenAI and Google.
This latest move comes just four months after xAI closed a $6 billion Series C, backed by heavyweight investors including Andreessen Horowitz, Blackrock, Fidelity Management, and A16Z. Now, insiders say xAI is back in talks with investors for what could be one of the largest tech fundraising efforts of the year.
During a recent call with xAI’s investors, Musk did not explicitly confirm a new round. However, sources familiar with the discussions told Bloomberg that another raise is imminent. Although the exact amount is still under negotiation, expectations are already sky-high.
The timing is no accident. Just last month, xAI completed a major strategic move by acquiring X (formerly Twitter) in an all-stock deal. The transaction valued xAI at $80 billion and X at $33 billion, further intertwining the futures of the AI startup and Musk’s social media platform.
Musk announced the combination in a post on X, emphasizing that blending xAI’s cutting-edge AI capabilities with X’s massive user base would unlock enormous potential. He described the merger as the official fusion of data, models, compute, distribution, and talent.
Launched in July 2023, xAI’s mission is anything but modest. Musk envisions the company as an engine for uncovering the universe’s deepest mysteries. To achieve this, he assembled a powerhouse team of engineers and researchers, many of whom previously worked at Google DeepMind, OpenAI, Microsoft Research, and Tesla. Notably, they helped drive major AI breakthroughs like AlphaCode and OpenAI’s GPT-3.5 and GPT-4.
Musk, who co-founded OpenAI in 2015 but stepped away from the board in 2018, has since criticized Big Tech’s direction in AI development. He has voiced concerns about potential censorship and the need for “truth-focused” AI systems. His goal for xAI is to create artificial intelligence that seeks fundamental truths, offering an alternative to products like Google’s Bard and Microsoft’s Bing AI.
With OpenAI, Google, and Anthropic dominating headlines with their powerful AI models, Musk’s xAI is positioning itself to be a serious contender. By combining cutting-edge AI research with the reach of a global social media platform, Musk is betting that xAI can carve out a dominant place in the next era of AI innovation.
As the fundraising talks continue, the tech world is watching closely. If Musk secures $20 billion in fresh funding, xAI could dramatically reshape the competitive landscape—and accelerate the race toward the future of artificial intelligence.
