Elon Musk’s artificial intelligence startup, xAI, has reportedly raised $10 billion in a new funding round at a $200 billion valuation, according to CNBC. The deal marks one of the largest AI fundraising rounds to date and further underscores investor enthusiasm for companies building large-scale foundational AI models.
The $200 billion valuation places xAI among the most valuable AI startups in the world. Earlier this month, rival Anthropic raised $13 billion at a $183 billion valuation, while OpenAI continues to lead the field, with a secondary share sale earlier this year valuing the company at $500 billion.
The fundraising comes just weeks after Musk raised $10 billion in debt and equity at what was believed to be a $150 billion valuation. Last December, xAI brought in $6 billion to accelerate development of its AI systems, including its flagship Grok chatbot. However, Grok has faced controversy, drawing criticism for offensive outputs and lagging behind competitors like Anthropic’s Claude and OpenAI’s GPT models in terms of adoption.
Despite the setbacks, Musk has made clear that xAI is a critical piece of his broader AI ambitions. In March, xAI merged with Musk’s social platform X in an all-stock deal that valued the AI firm at $80 billion and X at $33 billion. Musk also revealed plans in May to acquire one million AI chips, suggesting that much of the newly raised capital could be directed toward building massive GPU-powered data centers and recruiting top-tier AI talent. The company is already constructing a large AI cluster in Memphis, Tennessee, dubbed “Colossus II.”
xAI could soon also receive fresh capital from Tesla. At the company’s 2025 annual meeting on November 6, Tesla shareholders will vote on whether to invest in xAI, marking yet another example of Musk’s companies overlapping and sharing resources. The same meeting will also ask investors to approve a historic $1 trillion pay package for Musk.
For now, xAI’s $200 billion valuation cements its position as a frontrunner in the AI race, even as the company works to close the gap with its better-established rivals.
Update (September 19, 2025): Musk denied news of the investment on X, noting that “xAI is not raising any capital right now.”
