According to CNBC on Monday, Elon Musk, CEO of Tesla and founder of AI startup xAI, is reportedly in talks with investors to secure additional funding for the company.
Sources familiar with the matter revealed that during a recent call with xAI investors, Musk discussed strategies to boost the company’s valuation to a reasonable level. This move is widely interpreted as a precursor to a significant fundraising effort.
CNBC reports that xAI is targeting revenue exceeding 1 billion USD, a milestone that would follow its impressive 6 billion USD investment round from June last year, which valued the company at 50 billion USD. That earlier funding round saw 5 billion USD from a Middle Eastern sovereign wealth fund, with the remaining 1 billion USD from various investors. The capital was primarily used to acquire 100,000 NVIDIA graphics processing units (GPUs), which are critical for AI development.
Founded by Musk in July 2023, xAI’s ambitious goal is to unravel the fundamental nature of the universe. The company made waves with the launch of its AI chatbot, Grok, which debuted after just two months of training and boasts real-time internet knowledge. xAI is positioning itself to compete with other AI heavyweights, including Anthropic’s Claude and OpenAI’s ChatGPT – the latter being a company Musk departed from in 2018.
In a strategic move this past March, Musk announced the merger of xAI with his social media platform X (formerly Twitter) through a stock exchange. He valued the combined entity at 80 billion USD, with X alone accounting for 30 billion USD.
In a separate development, Musk has reportedly turned his attention to the Department of Government Efficiency (DOGE), an entity tasked with overseeing spending cuts across federal agencies in the wake of U.S. President Donald Trump’s hypothetical second administration.