SpaceX's $2 Billion Investment in xAI: Musk's AI Ambitions and Cross-Company Synergies

Elon Musk's SpaceX might invest $2 billion in Musk's xAI | TechCrunch

One Elon Musk business might be making a big investment in another. According to a Wall Street Journal report that cites investors close to SpaceX, the company has agreed to invest $2 billion in Musk's AI startup xAI. The investment would reportedly be part of the $5 billion equity raise (along with another $5 billion in debt) that Morgan Stanley announced at the end of June. This would be SpaceX's first investment in xAI, and one of its biggest investments in another company. The WSJ says SpaceX already uses xAI's chatbot Grok to power customer service for its Starlink internet service, with plans for more partnerships. Musk has not been shy about using his various companies to support each other, for example merging xAI with X (formerly Twitter) earlier this year. And despite xAI's recent apology for Grok's antisemitic comments (including posts where the chatbot described itself as "MechaHitler"), Tesla is bringing Grok to its vehicles.

SpaceX to invest $2 billion in Musk's xAI startup, WSJ reports

July 12 (Reuters) - SpaceX has committed $2 billion to xAI as part of a $5 billion equity round, deepening the ties between tech billionaire Elon Musk's ventures as his artificial intelligence startup races to compete with rival OpenAI, the Wall Street Journal reported on Saturday. The investment follows xAI's merger with X and values the combined company at $113 billion, with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla's Optimus robots, the report added. SpaceX and xAI did not immediately respond to Reuters' requests for comment. Despite recent controversies involving Grok's responses, Musk has called it "the smartest AI in the world," and xAI continues to spend heavily on model training and infrastructure. Reporting by Rajveer Singh Pardesi in Bengaluru; Editing by Paul Simao Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Cybersecurity

Elon Musk Is Trying to Get His Other Companies to Foot the Bill for xAI

Elon Musk’s SpaceX is set to invest billions in his artificial intelligence company, and now he is hoping Tesla will do the same. Investors familiar with the matter told The Wall Street Journal that the rocket company SpaceX has agreed to invest a whopping $2 billion in xAI, the Musk-led firm behind the controversial large language model Grok. This investment makes up almost half of the $5 billion of equity that the AI company raised last month. Unsurprisingly, the richest man in the world isn’t satisfied. On Sunday, he posted on his social media platform X (formerly Twitter) that Tesla shareholders will vote on whether they will also invest in his AI company. He responded to an X user asking about a Tesla investment in xAI by posting, “It’s not up to me. If it was up to me, Tesla would have invested in xAI long ago. We will have a shareholder vote on the matter.†xAI merged with X earlier this year, putting it at a $113 billion valuation. The AI company is now reportedly targeting a $200 billion valuation in its next round of fundraising. This comes as xAI is also reportedly burning through cash at a rapid rate. According to Bloomberg, xAI is bleeding roughly $1 billion per month. Musk himself has since responded to the article as “nonsense.â€Â Since its launch, xAI has been racing to catch up with OpenAI and other industry leaders. The company unveiled its latest model, Grok 4, this month and claimed that it’s the “most intelligent model in the world.†Musk also introduced today a new “companions†feature allowing users to talk to Grok via 3D-animated characters. However, Grok has not been without its issues. Earlier this month, an update intended to address what Musk described as a “center-left bias†instead caused Grok to generate antisemitic propaganda, even referring to itself as “MechaHitler.†Shortly after, the company said it had taken steps to remove the offensive posts and had banned Grok from using hate speech on X.Â

SpaceX invests $2 billion in Musk's AI startup, xAI

Elon Musk is once again funding Elon Musk -- this time, to the tune of $2 billion. SpaceX, the rocket company Musk founded and controls, is reportedly investing $2 billion into xAI, his artificial intelligence startup best known for building Grok, the erratic (and controversial) chatbot now embedded in X, formerly Twitter. The deal, first reported by the Wall Street Journal, represents nearly half of a $5 billion equity round backed by Morgan Stanley that values xAI at approximately $113 billion. The move is the latest example of Musk tapping one company in his sprawling empire to bolster another -- a playbook he's returned to repeatedly across his ventures. In Tesla's early days, he borrowed millions from SpaceX to keep the company afloat. When he took over what was then Twitter in 2022, he deployed staff from Tesla, SpaceX, and the Boring Company to help with the transition. And more recently, Tesla revealed that xAI had purchased $191 million worth of its Megapack energy storage systems last year. Now, Musk says Tesla could be the next to invest directly in xAI. But this time, he insists the decision won't be his alone. "It's not up to me," Musk wrote on X on Sunday in response to a user who suggested Tesla should be allowed to buy into xAI. "If it was up to me, Tesla would have invested in xAI long ago. We will have a shareholder vote on the matter." The question of how Musk's businesses are interconnected -- and how much they financially benefit one another -- has taken on renewed significance as xAI rapidly expands. Musk launched the startup in 2023 as a competitor to OpenAI, Google DeepMind, and Anthropic. In March, he merged xAI with X in a deal that reportedly valued the AI company at $80 billion and the social media platform at $33 billion. Since then, Musk has been integrating xAI's Grok chatbot across his businesses. The tool now powers customer service for Starlink, SpaceX's satellite internet division, and Musk said last week that Grok would soon be in Tesla vehicles. The CEO has also said that he plans to incorporate Grok into Tesla's humanoid robot prototype, Optimus. That expansion has come at a steep cost. According to Bloomberg, xAI is burning through roughly $1 billion a month as it races to build and train its large language models -- and keep up with competitors. The company has already raised over $12 billion through a mix of debt and equity and, per the Financial Times, is seeking a funding round that could value it as high as $200 billion. (Musk called this "false" and said xAI "has plenty of capital.) Grok's performance, however, has drawn mixed reviews. While third-party AI assessment firm Artificial Analysis called the latest version, Grok 4, "higher quality compared to average," the chatbot has recently come under fire for various reasons, including for generating antisemitic content on X. xAI issued a public apology on Saturday, saying it had taken corrective action on the "horrific behavior." SpaceX, meanwhile, rarely backs outside ventures. Musk said recently the firm would hit $15.5 billion in revenue this year, thanks to both launch services and its satellite internet business, and it reportedly had over $3 billion in cash on hand earlier this year. But SpaceX has its own capital needs: It's currently spending heavily on Starship, the rocket system the company hopes will power future missions to the Moon and Mars. The rocket has suffered multiple delays and catastrophic failures in testing this year, and SpaceX also is facing a more competitive satellite market as rival networks ramp up -- and as Musk may no longer get sweetheart deals from the Trump administration amid the CEO's fallout with the president. Notably, though, this latest cross-business investment doesn't seem to be driven by desperation. Neither xAI nor SpaceX appears to be strapped for cash or lacking investor interest. While Musk's constellation of companies has long overlapped operationally, this latest round of cross-investment could raise questions about governance. Is this legal? Yes; related‑party investments are permitted. Loans and transactions between related companies aren't inherently unusual -- but they often trigger scrutiny, particularly when they involve self-dealing or limited transparency. And with Musk, that scrutiny tends to collide with complexity. He runs and effectively controls three of the most valuable private and public companies on the planet: Tesla, with a market cap just under $1 trillion; SpaceX, last valued at roughly $400 billion; and X/xAI, now pegged at $113 billion post-merger. That level of personal control is rare. And so is the scale of the capital in motion -- and the fact that there's so little precedent to compare it with. For investors and analysts, assessing the risks of Musk's overlapping empire and his resource-shuffling patterns means operating in largely uncharted territory. Musk has long dismissed concerns about how closely his companies are intertwined, often framing the overlap as a strategic advantage rather than a governance risk. But Tesla's board has previously faced legal challenges over those blurred lines -- including a 2016 shareholder lawsuit that alleged that Tesla overpaid to acquire SolarCity, a company of which Musk was the chairman and largest shareholder. Musk ultimately won the case, though it renewed scrutiny of his management style. Now, with $2 billion flowing from SpaceX to xAI and with Tesla potentially next to invest, the spotlight is back on how -- or whether -- Musk separates his businesses. Whether investors see these moves as synergy or a red flag may come down to where Musk and his companies draw the lines -- if they draw them at all.

SpaceX to Invest $2 Bn in xAI to Expand Grok's Capabilities | AIM

The investment from SpaceX is part of xAI's $5 billion equity fundraising effort, which was announced by Morgan Stanley last month. Elon Musk's SpaceX has approved an investment of $2 billion in his AI startup, xAI, which accounts for nearly half of the recent equity raised by the Grok chatbot maker, according to investors close to the companies, The Wall Street Journal reported. The investment from SpaceX is part of xAI's $5 billion equity fundraising effort, which was announced by Morgan Stanley last month. This marks the first known investment by the rocket manufacturer in xAI and is among its most substantial investments in another company. Since stepping down from his position in the Donald Trump administration, Musk has focused on training the latest version of Grok, which received high ratings from AI-benchmarking service Artificial Analysis for its performance after its release on July 9. Musk has often used his business empire to support the AI startup racing to compete with OpenAI. Earlier this year, he merged xAI with X, combining a small research lab with a social media platform to boost the Grok chatbot's visibility. The merger was valued at $113 billion. Grok reportedly powers customer support for SpaceX's Starlink satellite internet service. Musk's representatives indicated that more partnerships between SpaceX and xAI may occur in the future. During the launch of Grok 4 this week, Musk revealed plans to integrate Grok into Tesla's Optimus humanoid robots. Musk has frequently leveraged SpaceX to benefit his other businesses. He borrowed $20 million from SpaceX to support early Tesla operations and used its resources for The Boring Company. Recently, he obtained a $1 billion loan from SpaceX during his acquisition of Twitter, which he quickly repaid. Although Musk described it as "the smartest AI in the world", the chatbot hasn't gained as much popularity as OpenAI's ChatGPT. It recently made racist and controversial remarks on X. "We deeply apologise for the horrific behaviour that many experienced," xAI said, adding that it investigated and took action to resolve the issue. As per reports, SpaceX's investment in xAI could pose challenges for Musk's aerospace firm. While SpaceX has seen a significant increase in revenue lately, the company is putting billions into the development of a new rocket known as Starship. The prototype has faced delays and has encountered several setbacks this year, including three consecutive flight failures and a major explosion during an engine test last month.

SpaceX to invest $2 billion in Musk's xAI startup: Reports

SpaceX has invested $2 billion in xAI as part of a $5 billion equity round, strengthening Elon Musk's AI endeavors. This investment values the merged xAI and X at $113 billion, with the Grok chatbot now supporting Starlink and potentially integrating into Tesla's Optimus robots. Despite controversies, Musk touts Grok as the smartest AI, driving xAI's heavy spending on development. SpaceX has committed $2 billion to xAI as part of a $5 billion equity round, deepening the ties between tech billionaire Elon Musk's ventures as his artificial intelligence startup races to compete with rival OpenAI, the Wall Street Journal reported on Saturday. The investment follows xAI's merger with X and values the combined company at $113 billion, with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla's Optimus robots, the report added. SpaceX and xAI did not immediately respond to Reuters' requests for comment. Despite recent controversies involving Grok's responses, Musk has called it "the smartest AI in the world," and xAI continues to spend heavily on model training and infrastructure.

Elon Musk's SpaceX Commits $2 Billion To xAI In $5 Billion Round As AI Startup Hits $113 Billion Valuation Amid Controversy - Tesla (NASDAQ:TSLA)

SpaceX has agreed to invest $2 billion in Elon Musk's artificial intelligence company xAI. The investment makes up nearly half of the company's recent $5 billion equity round, according to investors cited by The Wall Street Journal. After xAI merged with the social media platform X, the new entity was valued at $113 billion. The move combined xAI's research operation with X's platform reach, expanding the audience and real-world integration potential for the company's AI products, the Journal reports. 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Investment: $1,000 Valuation: $3.5B Click Here To Invest For Just $0.80/Share ($1000 Min)Musk Says 'We Have Improved Grok Significantly' as AI Tool Expands From Starlink Support to Tesla Robots The Grok chatbot developed by xAI is currently being used to support customer service operations for Starlink, SpaceX's satellite internet division. According to the Journal, Musk has said he also intends to embed Grok into Tesla's TSLA humanoid robot fleet, Optimus, as part of a broader plan to bring artificial intelligence into the company's physical products. Musk has described Grok as "the smartest AI in the world," though the chatbot has not yet matched the widespread popularity of OpenAI's ChatGPT, the Journal says. The model recently received high scores from benchmarking service Artificial Analysis. Several posts from Grok's official account on X were removed after user complaints and feedback from the Anti-Defamation League, according to Reuters. The posts included language suggesting a historical figure could address anti-white sentiment and made references to Jewish surnames in the context of activism, prompting concerns about antisemitic tropes. The organization urged xAI and other developers of large language models to take stronger precautions against generating content flagged as extremist or inappropriate. Trending: $100k+ in investable assets? Match with a fiduciary advisor for free to learn how you can maximize your retirement and save on taxes - no cost, no obligation. "We are aware of recent posts made by Grok and are actively working to remove the inappropriate posts," Grok said. The post also said that xAI had taken action to ban hate speech before Grok posts on the platform. The company attributed earlier controversial responses to an unauthorized change in Grok's software and has since initiated further refinements. Musk also posted, "We have improved Grok significantly," indicating ongoing technical adjustments. Strategic Investment Aligns With Musk's Track Record of Cross-Venture Support The investment marks the first known capital injection from SpaceX into xAI and is also one of the largest investments SpaceX has made into another company, according to the Journal. Musk has a long history of leveraging his various businesses to support one another, including using SpaceX equipment for The Boring Co. and borrowing funds from SpaceX during Tesla's early days. See Also: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here's how you can earn passive income with just $10. Musk's representatives have reportedly told investors that additional business partnerships between SpaceX and xAI are likely in the future, the Journal says. This signals a growing integration across Musk's portfolio, connecting AI development, space infrastructure, and consumer-facing technologies. At xAI, Musk is investing billions each year into training new AI models, mirroring the high-spending strategies seen at other well-funded AI startups. According to the Journal, these costs are being matched by rising valuations and increasing pressure to deliver competitive performance across multiple sectors. While xAI's ambitions remain large, including deeper integration with Tesla and other Musk-led ventures, the backlash underscores the challenges of scaling AI models that interact directly with the public. With the $2 billion investment, xAI's future developments may draw even more attention from stakeholders across the industry. Read Next: Are you rich? Here's what Americans think you need to be considered wealthy. 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Elon Musk's SpaceX Reportedly Investing $2 Billion in xAI | PYMNTS.com

That's according to a report Saturday (July 13) by The Wall Street Journal (WSJ), citing investors close to xAI and SpaceX. The report also noted that the $2 billion would be close to half of xAI's recent equity raise. It also marks one of SpaceX's largest investments in another company, the report added. As the report noted, Musk has repeatedly turned to his other businesses to support xAI as it competes with OpenAI. Earlier this year he combined the AI company with his social media platform X, a merger valuing the new company at $113 billion. Musk has also -- since stepping away from his White House role -- focused on training the newest iteration of xAI's Grok chatbot. The company rolled out the new Grok this week, with Musk both bragging about the model and worrying over what happens to humanity if the AI turns evil. "This is the smartest AI in the world," Musk said. "In some ways, it's terrifying." He compared Grok 4 to a "super-genius child" in which the "right values" of truthfulness and a sense of honor need to be instilled so society can enjoy its advances. Musk admitted to being "worried," saying that "it's somewhat unnerving to have intelligence created that is far greater than our own, and will this be bad or good for humanity?" before concluding that "most likely, it'll be good." The WSJ report noted that SpaceX's investment in xAI could pose risks for the former company. SpaceX has seen its revenue surge in recent years, but is spending billions to develop an experimental new rocket called Starship. That vehicle is behind schedule and has experienced several setbacks, including a large explosion during an engine test last month. In other AI news, PYMNTS wrote recently about efforts by chief financial officers to upskill their workforce to ensure their staff can effectively harness the technology. Research by PYMNTS Intelligence found that every CFO surveyed in June said generative AI has increased the need for more analytically skilled workers, up from 60% in March 2024. "The shift in the past year reflects growing hands-on use and a rising urgency to close capability gaps," according to the report. The CFOs also said the overall range of skills required across the business has changed, speaking to a need for people with AI-ready skills: "CFOs increasingly need talent that can evaluate, interpret and act on machine-generated output," the report said. The chief financial officer role itself is changing., with 27% of job listings for CFOs now calling for AI expertise.

SpaceX to invest $2 billion in Elon Musk's xAI startup: report

SpaceX has committed $2 billion to xAI as part of a $5 billion equity round, deepening the ties between tech billionaire Elon Musk's ventures as his artificial intelligence startup races to compete with rival OpenAI, the Wall Street Journal reported on Saturday. The investment follows xAI's merger with X and values the combined company at $113 billion, with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla's Optimus robots, the report added. In response to a post on X about whether Tesla could also invest in xAI, Musk said on Sunday, "It would be great, but subject to board and shareholder approval," without confirming or denying the Journal report on SpaceX's investment plans in xAI. SpaceX, xAI and Tesla did not immediately respond to requests for comment. Reuters could not immediately confirm the WSJ report. Despite recent controversies involving Grok's responses, Musk has called it "the smartest AI in the world," and xAI continues to spend heavily on model training and infrastructure.

SpaceX Invests $2 Billion in xAI to Power Elon Musk's AI Vision

SpaceX's $2B Investment in xAI Signals Elon Musk's Grand AI Integration Across Tesla, Starlink & Space Elon Musk's Space Exploration Technologies Corporation has recently invested $2 billion in its artificial intelligence company, xAI. This significant investment is part of xAI's $5 billion equity fundraising initiative, which was recently disclosed by Morgan Stanley. This latest development marks the largest external investment by SpaceX. It highlights Musk's goal of uniting his companies under a single technological vision.

SpaceX to invest $2 billion in Musk's xAI startup, WSJ reports

(Reuters) -SpaceX has committed $2 billion to xAI as part of a $5 billion equity round, deepening the ties between tech billionaire Elon Musk's ventures as his artificial intelligence startup races to compete with rival OpenAI, the Wall Street Journal reported on Saturday. The investment follows xAI's merger with X and values the combined company at $113 billion, with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla's Optimus robots, the report added. In response to a post on X about whether Tesla, could also invest in xAI, Elon Musk said on Sunday, "It would be great, but subject to board and shareholder approval," without confirming or denying the Journal report on SpaceX's investment plans in xAI. SpaceX, xAI and Tesla did not immediately respond to requests for comment. Reuters could not immediately confirm the WSJ report. Despite recent controversies involving Grok's responses, Musk has called it "the smartest AI in the world," and xAI continues to spend heavily on model training and infrastructure. (Reporting by Rajveer Singh Pardesi in Bengaluru, additional reporting by Dheeraj Kumar; Editing by Paul Simao and Louise Heavens)