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Elon Musk’s artificial intelligence startup, xAI, is reportedly in advanced discussions to raise $15 billion in new equity, a move that would propel the young company to a staggering $230 billion valuation, according to sources speaking with The Wall Street Journal. If completed, the deal would nearly double xAI’s valuation from the $113 billion disclosed in March after its acquisition of X (formerly Twitter).
The fundraising push comes just days after Musk publicly dismissed a CNBC report on the round as “false,” continuing his sharp criticism of what he calls misleading “legacy media.” When contacted for comment, xAI itself responded with a terse automated message: “Legacy Media Lies.”
According to insiders, Musk’s longtime wealth manager Jared Birchall briefed investors on the updated terms Tuesday evening. It remains unclear whether the $230 billion valuation reflects the company’s worth before or after the planned $15 billion infusion.
Founded in July 2023, xAI has raised billions to support its race against OpenAI and other AI giants. In June, the company secured $5 billion in equity and $5 billion in debt to build its massive “Colossus” supercomputer in Memphis, Tennessee — a project backed in part by Musk’s other ventures, including SpaceX, which invested $2 billion.
But the rapid growth has not been controversy-free. Environmental groups have protested the Memphis site, arguing that xAI’s natural gas-powered turbines worsen air quality. Demonstrators marched through the city in October with signs reading “Stop Poisoning Our City” and “We Will Not Comply with xAI.”
Meanwhile, Musk’s AI products have sparked debate. His Grok chatbot and the companion “Grokipedia” platform — positioned as alternatives to ChatGPT and Wikipedia — have been criticized for perceived political leanings, though some users argue the platforms are more balanced than mainstream tech offerings.
Musk has been increasingly vocal about integrating xAI with his other companies. He has pushed for Tesla to invest in the AI startup, though shareholders recently declined to approve the move, leaving the decision to Tesla’s board. Despite this, xAI has purchased tens of millions of dollars’ worth of Tesla battery storage systems for its data centers, and newer Tesla models already include xAI’s Grok chatbot in their infotainment systems.
The xAI fundraising news also comes amid Musk’s record-breaking personal milestones. Tesla investors recently approved his $1 trillion pay package, the largest compensation plan in corporate history — potentially setting the stage for Musk to become the world’s first trillionaire if Tesla hits ambitious long-term targets.
If finalized, xAI’s $230 billion valuation would rank among the highest for any privately held tech company, signaling both investor confidence and the frenzied capital flooding into artificial intelligence. Yet Musk himself has warned that the AI boom carries the risk of “irrational exuberance.”
For xAI, the coming months will determine whether Musk can secure the funding needed to challenge top AI players — and whether his sprawling, interconnected tech ecosystem will strengthen or strain the company’s long-term ambitions.
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