Elon Musk‘s artificial-intelligence company, xAI, is in advanced talks to raise $15 billion in new equity at a $230 billion valuation, according to a report published late Tuesday.
Valuation More Than Doubles
The terms of the new fundraising were disclosed to investors by Musk's wealth manager, Jared Birchall, on Tuesday night, the Wall Street Journal reported, citing people familiar with the plans.
xAI, launched in July 2023 as a rival to OpenAI, did not immediately respond to Benzinga’s request for comment.
It couldn't be determined whether the expected new valuation Birchall shared with investors was premoney or postmoney, according to the report.
The new valuation would represent a more than double increase from the $113 billion xAI disclosed after acquiring Musk's social-media site, X, in March.
WSJ’s report comes days after a similar fundraising report by CNBC last week, which Musk later called “False” in a post on X.
Musk has also previously floated the idea of using Tesla to back xAI. xAI's Grok competes directly with OpenAI’s ChatGPT, Google's Gemini, and other leading AI bots.
The startup recently lost several senior executives, including X CEO Linda Yaccarino and the finance chiefs at X and xAI.
See also: Elon Musk Says Tesla, xAI Are ‘Trending Towards Convergence’ In Some Ways
AI Investments Boom As Investors Weigh Risks
Many AI startups, including xAI, have reached sky-high valuations in recent months, as they raise money to invest billions in a bid to build infrastructure to help train and refine AI models.
A report on Monday said Data analytics firm Databricks is in talks to raise capital at a valuation of more than $130 billion, which is about 30% higher than its last financing round two months ago.
xAI is also investing heavily in infrastructure, including property in Memphis, Tennessee, for its planned Colossus supercomputer.
Meanwhile, investor appetite for AI companies remains robust despite growing concerns of an AI bubble, fueled by soaring valuations and aggressive spending plans.
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