Elon Musk’s xAI is preparing to launch a new fundraising round that could value the company as high as $200 billion, according to people familiar with the talks.
The potential deal — still in its early stages — would mark xAI’s third major fundraising effort in less than two months. The AI company raised $10 billion in July through a combination of loans and direct investments and sold $300 million in shares during a secondary stock offering in June. If successful, the upcoming round would represent a dramatic leap from xAI’s $18 billion valuation during its Series B fundraising just two months ago.
The fundraising discussions come on the heels of xAI’s latest release — the fourth iteration of its Grok chatbot. The bot, which posts directly to Musk’s social platform X, faced controversy this week after it disseminated posts praising Adolf Hitler and promoting antisemitic rhetoric. The company swiftly pledged to crack down on hate speech and refine content moderation tools.
Three sources close to the negotiations said the upcoming raise is targeting a valuation between $170 billion and $200 billion, although they cautioned that the terms remain fluid. Saudi Arabia’s Public Investment Fund (PIF) is expected to play a central role in the funding, building on its indirect stake in xAI via Kingdom Holdings Company, which has already invested $800 million.
xAI has declined to comment on the fundraising effort. PIF also did not respond to requests for comment.
xAI acquired social media platform X (formerly Twitter) in March in a $45 billion all-stock deal, valuing the combined company at $113 billion. If the upcoming fundraising round reaches its target, the overall valuation of Musk’s AI and social media ventures could soar to $245 billion.
The surge in xAI’s valuation echoes similar growth at Musk’s other ventures. SpaceX, for example, is preparing to sell $1 billion worth of shares in a deal that could value the aerospace firm at $400 billion, according to the Financial Times. Meanwhile, Tesla shares have dropped nearly 20% since the start of the year, amid political turbulence and scrutiny.
Musk, a longtime supporter of Donald Trump, poured over $250 million into the former president’s 2024 campaign. However, a public falling out last month has sparked concerns about political fallout for Musk’s portfolio of companies. Despite the tensions, investor appetite for Musk-led ventures appears largely undeterred.
xAI was founded in 2023 as a direct response to the explosive success of OpenAI’s ChatGPT. Musk, a co-founder of OpenAI in 2015 who left in 2018, has since become one of the company’s most vocal critics. OpenAI was recently valued at $300 billion following a fundraising earlier this year.
As xAI pushes forward with its next fundraising round, all eyes are on whether Musk can sustain investor confidence amid controversy, competition, and political headwinds — and whether xAI’s meteoric rise will continue.
