Elon Musk’s artificial intelligence venture xAI is closing in on a fundraising round of roughly $15bn, a move that would lift the company’s valuation to about $230bn, according to people familiar with the discussions. The target, circulated to prospective backers this week by Musk’s adviser Jared Birchall, reflects a doubling of xAI’s value since it acquired the social media platform X earlier this year.
If completed, the deal would cap a complicated period for the fast-growing company, which has recently cycled through multiple senior finance executives even as Musk publicly dismissed claims that he was seeking new capital. Secondary-market trading has already hinted at the heightened valuation, with shares changing hands at levels exceeding $200bn in recent weeks.
Alongside the equity raise, private equity group Valor Equity Partners, led by Antonio Gracias, is attempting to secure an additional $15–$20bn in financing—both debt and equity—to bulk-purchase AI chips on behalf of xAI. The company has been racing to expand its compute footprint as it tries to compete with OpenAI, Meta and Google in the development of next-generation models.
The new funding push follows several major capital injections this year, including a $10bn package to accelerate the build-out of xAI’s “Colossus” data centre in Memphis and a secondary share sale of about $300mn. Musk has also announced plans for a separate 500-megawatt data facility in Saudi Arabia in partnership with the state-backed AI initiative Humain, using Nvidia hardware.
Musk has increasingly positioned xAI at the heart of his technology empire. Its chatbot, Grok, is being integrated into X and trialled within some Tesla vehicles. A recent nonbinding shareholder proposal asking Tesla to invest in xAI drew 43 per cent support, signalling significant investor interest even as the company’s board evaluates next steps.
Meanwhile, xAI’s rapid ascent comes as OpenAI faces turbulence of its own. Former US Treasury secretary Lawrence Summers resigned from OpenAI’s board this week after congressional documents revealed past email exchanges with the late financier Jeffrey Epstein. The correspondence showed Summers had sought personal advice from Epstein several years before his death.
Summers, who joined OpenAI’s board in late 2023 during a period of internal upheaval, said he was stepping away from public roles following the disclosures. His departure adds to a growing list of positions he has relinquished across think tanks, advisory bodies and media outlets. OpenAI thanked him for his service but has not announced a successor.
Despite the controversy, OpenAI continues to draw major investor interest. The company is reportedly in talks for a funding package that could total $15bn from Microsoft and Nvidia—potentially valuing it north of $300bn—as competition among leading AI developers intensifies.
