Elon Musk’s xAI Pursues $15 Billion Funding at $230 Billion Valuation

TLDR

• Elon Musk’s xAI is negotiating a $15 billion funding round at a $230 billion valuation, doubling its worth since March 2025.
• The funds will support AI infrastructure including the Colossus supercomputer facility in Memphis and training for the Grok chatbot.
• SpaceX has already invested $2 billion in xAI, while Musk wants Tesla to participate in the funding round.
• Tesla’s board chair has raised concerns about investing company funds in xAI without proper due diligence.
• Recent executive departures from both xAI and X include the chief financial officers and Linda Yaccarino.

Elon Musk’s artificial intelligence venture xAI is in late-stage negotiations to secure $15 billion in new capital. According to the Wall Street Journal, the company is seeking a $230 billion valuation in this funding round.

The valuation represents more than double the $113 billion figure from March 2025 when xAI acquired X. Last week, Musk denied reports that xAI had already closed a $15 billion round at a $200 billion valuation.

Jared Birchall, who manages Musk’s wealth, presented the funding terms to potential investors. The reports did not specify if the $230 billion represents a pre-money or post-money valuation.

This would be one of the largest funding rounds in artificial intelligence history. The money will go toward building physical infrastructure rather than just developing software.

Building AI Infrastructure

xAI previously raised $10 billion in June 2025 through a combination of equity and debt. That capital was designated for constructing the Colossus data center in Memphis, Tennessee.

The company is racing to develop infrastructure that can compete with established players like OpenAI and Anthropic. xAI’s main product is Grok, a chatbot that requires substantial computing resources for training.

SpaceX has contributed $2 billion to xAI’s funding efforts. This creates financial ties between multiple Musk-controlled companies.

Musk has openly advocated for Tesla to invest in xAI. He presented this idea at a recent shareholder meeting where it received mixed feedback.

Robyn Denholm, Tesla’s board chair, pushed back on the proposal. She cited the absence of proper board review and questioned the strategic benefits for Tesla shareholders.

Cash Requirements and Leadership Turnover

AI startups across the industry are spending heavily on infrastructure and model development. xAI follows this pattern as it works to catch up with more established competitors.

The company is expanding its data center capacity to train increasingly powerful AI models. The Memphis facility will house the Colossus supercomputer project.

Several top executives have left xAI and X in recent months. Departures include Linda Yaccarino from X and the chief financial officers from both organizations.

xAI’s funding approach emphasizes owning physical infrastructure over licensing software. This strategy mirrors investments by major cloud providers like Amazon Web Services and Microsoft Azure.

The company operates within Musk’s broader business ecosystem. This includes Tesla, SpaceX, X, and other ventures that could potentially integrate xAI’s technology.

Market Position

The $230 billion valuation would place xAI among the most valuable private artificial intelligence companies. Competition for funding and market share in AI continues to accelerate.

xAI competes directly with OpenAI’s ChatGPT and Anthropic’s Claude chatbot. The company must rapidly scale infrastructure to remain competitive in the fast-moving AI market.

The funding round details are still being finalized with investors. Terms could change before any deal closes.

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