Musk's xAI in Early Talks to Raise Billions of Dollars

Elon Musk’s xAI Holdings is reportedly in early discussions to raise $20 billion in fresh funding, which could value the company at over $120 billion, according to Bloomberg.

If finalised, this would be the second-largest startup funding round in history, trailing only OpenAI’s $40 billion raise last month.

The funding could significantly ease X’s heavy debt load, which Bloomberg sources say costs about $200 million per month in servicing fees, with annual interest expenses exceeding $1.3 billion as of late last year.

Musk is expected to attract support from longtime backers of his ventures, including Antonio Gracias of Valor Equity Partners and Luke Nosek of Gigafund. Gracias has even assumed a government-related role in Musk’s Department of Government Efficiency.

Last month, xAI acquired the social media platform X (formerly Twitter) in an all-stock transaction valued at $33 billion. This strategic move aims to integrate xAI's advanced AI capabilities with X's extensive user base, enhancing the development and deployment of AI tools like the chatbot Grok.

The merger is expected to facilitate the training of Grok by leveraging X's vast real-time data, thereby improving its performance and user experience.