Elon Musk’s xAI could soon be worth more than $200 billion

Elon Musk’s artificial intelligence company xAI is reportedly nearing a fundraising deal that would more than double its valuation to $230 billion.

The company, which makes the Grok AI chatbot, is in advanced talks to raise $15 billion in new equity, The Wall Street Journal reports. The new valuation would represent more than twice the $113 billion xAI disclosed when it bought Musk’s social media platform X in March.

A raise of this size would mark another significant step in the AI funding race that has swept the financial world this year. Competitors including OpenAI have raised vast sums to build new infrastructure and improve their chatbots. OpenAI closed a $6.6 billion share sale valuing it at $500 billion in October.

Also this week, Anthropic got a $5 billion investment from Microsoft and $10 billion from Nvidia that pushed its valuation up to about $350 billion.

The trend has fueled concerns that tech company valuations are becoming overinflated, with leaders including Google chief executive Sundar Pichai drawing comparisons with the dot-com bubble around the turn of the century, which eventually burst.

Musk has been vocal in suggesting that Tesla, which he also leads, invest in his AI firm. But at Tesla’s recent shareholder meeting, shareholders were not so sure. A proxy vote on the issue did not bring enough votes in favor of such a measure for Tesla to inject cash into xAI.

Grok has attracted widespread backlash for generating false content, anti-semitic statements and other hate speech. It recently launched a website called Grokipedia, which is supposed to rival Wikipedia.

Previously, xAI raised $5 billion in equity plus $5 billion in debt in June to build out a data centre in Tennessee. Musk’s SpaceX reportedly contributed $2 billion to that round.

The terms of the latest fundraise were revealed to investors on Tuesday, The Wall Street Journal reported. Musk posted on X saying “false” in response to a similar CNBC report on a fundraise by xAI last week.

Separately, Musk was at a dinner with President Donald Trump at the White House on Tuesday, as part of a visit by Saudi Crown Prince Mohammed bin Salman. His appearance has led to speculation that a bitter feud between Musk and Trump could be thawing.

xAI didn’t immediately respond to a request for comment.