Elon Musk's xAI Gears Up for Massive Funding Round and Ambitious AI Projects

Musk says he's looking to put 'proper value' on xAI during investor call, sources say

Tesla CEO Elon Musk attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025. Elon Musk is looking to put "proper value" on his artificial intelligence startup xAI, sources told CNBC's David Faber. The comments came during a call with xAI investors last week, sources familiar with the matter told Faber. While the Tesla CEO didn't explicitly address an upcoming funding round, the sources interpreted the comments as a sign that xAI is getting set up for a significant capital raise in the near future. CNBC was unable to confirm that the company is actively looking at a raise. The raise would mark another significant milestone for xAI just months after CNBC reported that the company was raising up to $6 billion at a $50 billion valuation to buy up 100,000 Nvidia chips. The funding was reportedly a combination of $5 billion from Middle East sovereign funds and $1 billion from other investors.

Musk: xAI needs a "proper value"

Elon Musk is looking to put "proper value" on his artificial intelligence startup xAI, sources told CNBC's David Faber during an investor call last week. The Tesla CEO did not explicitly address an upcoming funding round, but sources interpreted his comments as a sign that xAI is preparing for a significant capital raise. The comments came as xAI discussed revenue at a potential run rate of $1 billion or more during the call, sources familiar with the matter told Faber. CNBC was unable to confirm whether the company is actively pursuing a funding round. This development follows a report from November that xAI was raising up to $6 billion at a $50 billion valuation to purchase 100,000 Nvidia chips. The funding was reportedly a combination of $5 billion from Middle East sovereign funds and $1 billion from other investors. xAI was announced in July 2023 with the goal of "understanding the true nature of the universe." The company launched a chatbot called Grok last year, which it claimed had been trained in two months with real-time internet knowledge. xAI aims to compete against other AI chatbots, including Anthropic's Claude and ChatGPT maker OpenAI, which Musk co-founded before leaving in 2018. Is Elon Musk's xAI breaking clean air laws? In March, Musk announced that xAI had merged with social media platform X in an all-stock deal, valuing the combined entity at $80 billion. Musk stated that X had been valued at $33 billion, and noted that "xAI and X's futures are intertwined." Musk's recent focus on the Department of Government Efficiency has raised questions about the stability of his companies, with Tesla shares falling over 40% this year. His presence on the xAI investor call may signal a renewed focus on his business entities.

Elon Musk's xAI Reportedly Looking To Raise As Much As $25 Billion As It Continues Work On The Colossus 2 Supercomputer That Is Expected To House 1 Million NVIDIA GPUs At A Cost Of Over $35 Billion

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. After doubling the size of its existing Colossus supercomputer to 200,000 NVIDIA GPUs, Elon Musk's xAI has already started work on its next most ambitious project, and to acquire the attendant mammoth funding, the AI-focused enterprise is looking to raise a significant amount of money in its upcoming funding round. During a call with xAI's current investors last week, Elon Musk is reported to have said: "We're going to put a proper value on the company." According to CNBC's Faber, the investors present on the call interpreted this statement as an indication of an upcoming funding round. While speculative, Faber believes the funding round could be as large as $25 billion, and bestow a valuation of between $150 billion and $200 billion on xAI. For the benefit of those who might not be aware, xAI recently acquired the social media platform X in an all-stock deal that valued the former at $80 billion and the latter at $33 billion, inclusive of $12 billion in liabilities. This meant that the deal bestowed a gross valuation of $45 billion on X before factoring in its debt load of $12 billion. Bear in mind that Elon Musk took X (then called Twitter) private back in 2022 in a $44 billion deal. Since then, Musk has managed to stem X's cash bleed, with the company reportedly generating $1.2 billion in adjusted EBITDA in 2024. According to the investors present on the call, xAI is currently generating around $1 billion in annual revenue. This contrasts sharply with the erstwhile muted expectations of many investors, who did not expect the startup to generate any material revenue this year. Elsewhere, Faber also alludes to the fact that xAI is already working on its next big training supercluster, officially dubbed the Colossus 2, which is expected to eventually house as many as 1 million NVIDIA GPUs at a cost of between $35 billion and $40 billion. Even though xAI's Grok LLM is already largely comparable with OpenAI's cutting-edge models, the Colossus 2 would significantly up the ante, and could feasibly challenge OpenAI's apex position in the AI sphere.

Report: New Valuation Push for Elon Musk's xAI | PYMNTS.com

After spending much of his time and energy this year as head of the Department of Government Efficiency (DOGE), could Elon Musk be pivoting to refocus on his businesses? The sources also said a $1 billion potential run rate figure was mentioned on the call. CNBC said the investor call took place just months after reports that xAI was seeking to secure up to $6 billion at a $50 billion valuation, with the funding reportedly coming from Middle Eastern sovereign wealth funds and backing from global investors. That capital was earmarked for acquiring 100,000 Nvidia chips, CNBC said, a key component in the company's AI infrastructure. xAI recently merged with the Musk-owned social media platform X in an all-stock deal. PYMNTS reported that he valued xAI at $80 billion and X at $33 billion. Founded in July 2023, xAI launched the chatbot Grok last year to compete with other leading AI chatbots, including Anthropic's Claude and OpenAI's ChatGPT. The CNBC report said that at the time, xAI touted that Grok's real-time internet knowledge enabled it to launch with just two months of training. PYMNTS reported in March that xAI and Nvidia joined a $30 billion AI Infrastructure Partnership backed by BlackRock, Microsoft, and Abu Dhabi AI investment group MGX, with the ultimate goal to raise up to $100 billion for AI development. The partnership aims to build the next generation of AI-ready data centers and support the escalating demands of generative AI models.