Elon Musk’s xAI likely to head towards another round of fundraising, seeks $200 billion in valuation: Reports | Company Business News

Elon Musk-led xAI, the maker of artificial intelligence chatbot Grok, is on its way to raise more money from investors, two reports said on Friday.

According to the reports by the Financial Times and Blomberg, the deal, if materialised, could raise the value of the company to as high as $200 billion — 10 times from its value early last year.

The fundraising, which is being discussed currently, could start formally as soon as next month. This could also be the third largest share selling of the company in just less than two months, FT reported.

xAI raised $10 billion through loans and cash investments in July, split evenly between debt and equity. In June it sold $300 million worth of shares in a secondary stock offering.

The proposed deal would also cement a skyrocketing rise in xAI’s valuation from the $18 billion it clocked during its “series B” fundraising in May 2024.

xAI is now moving to raise another $10 billion, as per the report by Bloomberg quoting an anonymous source familiar with the development.

xAI waited until the release of its new model, Grok 4, to proceed with the additional fundraising effort, the person said.

Three people quoted by FT said that the new xAI fundraising is set to target a valuation of the company between $180 billion to $200 billion. However, the details could change, the sources said.

Saudi Arabia’s sovereign wealth fund, PIF, is likely to play a significant part in materialising the deal, two of the FT sources said. The fund holds an indirect interest in xAI through its share at Kingdom Holdings Company, which has already invested $800 million in the AI startup.

Elon Musk denies

In a post on X Friday, Elon Musk said, “xAI is not seeking funding right now. We have plenty of capital.”

xAIAI — the result of a merger of X with Musk’s AI startup xAI — would see its valuation climb in the latest deal, and cement its place as one of the world’s most valuable private companies if it reaches the $200 billion valuation.

Bloomberg previously reported that xAI is burning through $1 billion a month as it builds more advanced AI models.

(With inputs from Financial Times and Bloomberg)