Elon Musk’s xAI raises $15 billion, valuation hits $200 billion amid AI investment boom

xAI

Elon Musk’s artificial intelligence company, xAI, has raised another $15 billion in funding, boosting its valuation to around $200 billion. The massive round underscores investor appetite for AI ventures as the global race to build and train large language models intensifies.

According to a CNBC report citing sources familiar with the deal, xAI’s latest raise adds $5 billion to the $10 billion round reported in September. Much of this funding will go towards buying advanced graphics processing units (GPUs) — the backbone of modern AI infrastructure — as the company scales up its large language model development.

Founded by Musk in 2023, xAI is seen as a challenger to OpenAI and Anthropic in the race to build general-purpose AI systems. Its rapid growth mirrors the current frenzy in the sector, with valuations soaring for companies working on foundational models. In September, Anthropic secured $13 billion in funding, tripling its valuation from earlier in the year. OpenAI, meanwhile, closed a $6.6 billion share sale in October at a $500 billion valuation and is reportedly preparing for an IPO that could value it as high as $1 trillion.

XAI is also investing heavily in physical infrastructure, developing massive data centres equipped with tens of thousands of GPUs. One such site in Memphis has drawn criticism from environmental and civil rights groups, which are opposing the use of a gas-powered turbine to run the facility’s supercomputer. Earlier this year, Musk folded his social network X into xAI through an all-stock deal valued at $33 billion, consolidating his tech empire even further.

The funding news comes just days after Tesla shareholders approved Musk’s controversial $1 trillion pay package and voted on a proposal for Tesla to invest in xAI.