Musk’s xAI Eyes $170-$200 Billion Valuation in Upcoming Funding Round, Financial Times Reports

Elon Musk’s artificial intelligence company xAI is reportedly preparing to raise additional capital in a funding round that could value the firm between $170 billion and $200 billion, according to the Financial Times, citing sources close to the discussions. Saudi Arabia’s Public Investment Fund (PIF) is expected to play a significant role in the round, holding an indirect stake in xAI through its investment in Kingdom Holdings Company, which has put $800 million into the AI startup.

The discussions are still preliminary, and details may evolve, the report noted. Musk himself responded on X, stating that xAI is not currently seeking funding and has sufficient capital. PIF did not immediately comment on the report.

Previously, in June, Morgan Stanley disclosed that xAI completed a $5 billion debt raise along with a separate $5 billion strategic equity investment. The company is aggressively expanding its AI infrastructure with new data centers amid increasing competition in the sector.

xAI acquired X (formerly Twitter) in March, valuing the AI firm at $80 billion and X at $33 billion. Musk founded xAI in July 2023 to compete with OpenAI’s ChatGPT, which recently announced plans to raise up to $40 billion at a $300 billion valuation.

According to projections shared by Morgan Stanley, xAI expects to generate over $13 billion in annual earnings by 2029 and anticipates $1 billion in gross revenue by the end of this year. The company also plans to invest $18 billion in data center expansion going forward.