Elon Musk’s xAI Raises $10 bn to Power AI Ambitions
The investment includes $5 billion in equity and $5 billion in loans.
Elon Musk’s xAI Holdings Corp. has secured $10 billion in funding to accelerate its artificial intelligence projects, according to an announcement from Morgan Stanley, which facilitated the raise.
The investment includes $5 billion in equity and $5 billion in loans, some structured as secured notes backed by collateral—likely including valuable graphics processing units (GPUs), a method increasingly common in the AI sector.
This marks xAI’s third multi-billion-dollar round since early 2024, following a $6 billion raise in November and a merger with X that brought its valuation to $80 billion.
The funding will support xAI’s development of advanced AI technologies, notably its Grok platform and infrastructure projects such as one of the world’s largest data centers.
Last year, xAI launched the Colossus supercomputer in Memphis with 100,000 GPUs, a figure that has since doubled.
Plans are underway to deploy another 800,000 GPUs at a new site, acquired for $80 million, which spans one million square feet near a power plant.
To stabilise energy supply, xAI has installed over 165 Tesla Megapack systems, capable of storing 3.9 MWh each—enough to power 3,600 homes for an hour.
Figures shared by Morgan Stanley last month revealed that xAI is projecting more than $13 billion in annual earnings by 2029. xAI anticipates reaching $1 billion in gross revenue by year-end, with a dramatic surge to $13 billion by 2029.
The startup is also facing a potential lawsuit over alleged violations of the Clean Air Act at its Colossus data centre near Memphis, Tennessee.
Last m0nth, the Southern Environmental Law Center (SELC), on behalf of the NAACP, issued a formal notice of intent to sue, claiming xAI installed and operated at least 35 natural gas turbines without obtaining necessary air permits.
According to SELC, the turbines—capable of generating 421 megawatts—could emit more than 2,000 tons of nitrogen oxides (NOx) annually, contributing to Memphis’s already poor air quality.
