Elon Musk’s artificial intelligence company xAI has secured $10 billion in fresh funding, boosting its valuation to $200 billion, CNBC reported on Friday, citing sources.
The company has not yet responded to Reuters’ request for comment.
Investor appetite for AI startups remains strong, even as concerns grow about the tech industry’s heavy spending. The new valuation represents more than double the $75 billion figure recorded in July, according to PitchBook data.
This funding round makes xAI one of the world’s most valuable private companies, behind OpenAI, China’s ByteDance, and Musk’s own SpaceX.
Funding aims and competition
According to CNBC, the capital will likely be used to build advanced data centers powered by Nvidia and AMD GPUs, as well as to hire top AI talent. xAI is currently scaling its infrastructure to train more powerful models and compete with rivals like OpenAI’s ChatGPT and Anthropic’s Claude. Its supercomputer cluster, Colossus, located in Memphis, Tennessee, is considered the largest in the world.
OpenAI is reportedly exploring a stock sale that could value the firm at around $500 billion, while ByteDance is preparing a share buyback valuing the company at more than $330 billion. Earlier this month, Anthropic said it raised $13 billion at a $183 billion valuation.
xAI’s rapid rise
In June, Morgan Stanley reported that xAI had secured a $5 billion debt raise alongside a $5 billion strategic equity investment to expand its AI infrastructure. The company also acquired X, formerly known as Twitter, in March.
Musk launched xAI in July 2023 as a challenger to OpenAI’s ChatGPT, and the firm has since grown into a major force in the global AI race.
