Elon Musk's xAI Valuation Soars as SpaceX and Tesla Reach New Heights

Valuations at Elon Musk's SpaceX and xAI set to soar in new deals

Two of Elon Musk's private companies are set to secure multibillion-dollar jumps in valuation through new deals, as investors race to back the sprawling business interests of the world's richest man. SpaceX, the largest private company in the US, is preparing to launch a tender offer in December that will sell existing shares in the business at about $135 each, according to people with knowledge of the discussions. That would value the rocket builder at more than $250bn, up from about $210bn during a similar deal earlier this year. Meanwhile, Musk's artificial intelligence start-up xAI has raised $5bn at a valuation of $45bn, almost double its valuation a few months ago, according to the people. The fundraising has been carried out at breakneck speed as discussions between Musk and his investors began just last month. The double fundraising comes as Musk expands his focus beyond Silicon Valley to Washington DC, having helped to deliver the US election to Donald Trump earlier this month and becoming a key confidant to the president-elect. On Tuesday, Trump appointed Musk and Vivek Ramaswamy, a biotech entrepreneur and former presidential hopeful, to lead a new "department of government efficiency". It will "provide advice and guidance from outside of government" and look for ways to "dismantle" bureaucracy, Trump said in a statement. Musk's proximity to Trump has also helped to boost the share price of Tesla, the electric vehicle-maker he runs as chief executive, by almost 30 per cent since the November 5 election. The people close to the xAI fundraising said the deal had been "fully allocated", meaning all of the new shares had been assigned to investors, although it will not formally close until the end of the month. They added that the deal was oversubscribed and featured only investors who had backed the start-up in its previous fundraising round. The significant interest in xAI, which operates a ChatGPT rival called Grok, has fuelled Musk's efforts to compete with rivals such as OpenAI and Anthropic. It has also already prompted speculation about a subsequent fundraising in the first quarter of next year that could value the company as high as $75bn, according to two of the people. However, it was not yet clear if this had been communicated directly to investors by xAI. xAI has been developing an enormous cluster of 100,000 graphics processing units, the chips used to train and run AI tools, in Memphis. The project, nicknamed Colossus, would be one of the biggest supercomputers in the world. Musk's AI systems are likely to play a critical role across his many enterprises, which include X, Tesla, SpaceX and Neuralink. SpaceX is also likely to benefit from closeness to Trump. As well as a long-stated ambition to launch a mission to Mars, Musk wants to add to the company's network of 6,000 low Earth orbit satellites that constitute its Starlink broadband network. The billionaire has also regularly fought battles with an array of US regulators that he believes have stymied Tesla and SpaceX. Musk and SpaceX did not immediately respond to requests for comment.

Elon Musk's xAI's value is set to double, joining SpaceX and Tesla in reaching new heights

Two of Elon Musk's private ventures are set to be worth a lot more, joining his sole public company in securing massive valuations. His artificial intelligence startup, xAI, is raising up to $6 billion at a $50 billion valuation, CNBC reports, citing anonymous sources. Five billion dollars are expected from sovereign funds in the Middle East, while the remainder comes from domestic investors. The Financial Times previously reported that Musk had approached investors in Qatar and Saudi Arabia about backing the startup, which he launched last July as a competitor to Sam Altman's OpenAI, as well as current investors like Sequoia Capital and Valor Equity Partners. At the time, a $45 billion valuation had been floated. If the deal closes, it would more than double the $24 billion valuation xAI reached in May, when the company announced it had raised $6 billion from backers like Andreessen Horowitz and Saudi Arabian investor Prince Alwaleed bin Talal. The new funds are expected to go toward the acquisition of 100,000 Nvidia (NVDA-3.93%) chips, CNBC reports. xAI in October won approval to expand its Colossus supercomputer in Memphis, Tennessee, which is expected to help train Tesla's (TSLA+2.74%) AI tech, including Full Self-Driving. And SpaceX, Musk's aerospace company that plans to test a mega-rocket on Monday, is also looking to raise cash. The largest private company in the U.S. plans to launch a tender offer next month to sell existing shares at about $135 a pop, according to the Times, citing people who are knowledgeable about the discussions. With that reported offer, SpaceX would be valued at $250 billion, up from $210 billion earlier this year. It would also make it worth more than Bytedance, the company behind TikTok and the most valuable startup in the world. Both startups are likely to benefit from Musk's tight-knit relationship with President-elect Donald Trump, who on Tuesday handed Musk an advisory board to recommend ways to slash regulations and federal spending. He's already signaled that he will use that job to try and benefit his companies. On Friday, he agreed with investor Ron Baron's comments that regulations should be changed so that companies don't need to repeatedly get permits to launch rockets. He previously said he would work to streamline federal regulations for driverless vehicles, which Tesla is working on. Musk is widely expected to play a role in guiding the Trump administration's AI initiatives. It's easier to see what effect that relationship has on Tesla, given that it's a public company. Since its CEO's big bet on Trump paid off, the stock has boomed, reaching a $1 trillion valuation and surging above $300 per share for the first time since 2022.