Elon Musk’s xAI is raising $10 billion from investors in a round that values the artificial intelligence startup at $200 billion, sources told CNBC’s David Faber.
It’s the latest example of skyrocketing valuations for companies developing foundational AI models. Earlier this month, Anthropic raised $13 billion at a $183 billion valuation. OpenAI, the largest company in the industry, held a secondary share sale that valued it at $500 billion.
The fundraising comes weeks after Musk raised $10 billion in debt and equity at what was believed to be a roughly $150 billion valuation, according to Faber. Last December, xAI raised $6 billion to fund its AI development.
However, xAI has been riddled with controversy due to incidents in which its Grok chatbot praised Adolf Hitler and attacked Jewish people and a separate occasion when Grok responded to user queries with unrelated comments about “white genocide” and South Africa.
Grok is also widely believed to lag behind Anthropic’s Claude and OpenAI’s GPT models in terms of capabilities and number of users.
In March, Musk announced that xAI had merged with X, his social network, in an all-stock transaction that valued the AI company at $80 billion and the social media company at $33 billion. Musk acquired Twitter for about $44 billion in 2022 and later changed the name to X.
Musk said in May that he wants to buy 1 million AI chips, Faber said. Much of the proceeds of this round of funding could go to building data centers filled with Nvidia and AMD graphics processing units (GPUs) that are needed to develop next-generation AI, as well as to hire expensive talent. The company is currently building a large cluster of AI computers in Memphis, Tennessee.
Separately, Tesla’s board of directors asked investors to approve a new pay package for Musk earlier this month that could be worth as much as $975 billion. Musk has said he does not support a merger between xAI and Tesla.
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https://www.cnbc.com/2025/09/19/musks-xai-10-billion-at-200-billion-valuation.html
