Elon Musk’s artificial intelligence company xAI, has reportedly raised $10 billion in a new capital infusion, which now values the startup at about $200 billion. The fundraising marks one of the largest capital injections for any AI startup to date and places xAI among the world’s most valuable private companies, reports Bloomberg.
The latest funding is expected to be used mainly for expanding the firm’s technology and research capabilities. The company is buying advanced chips from Nvidia and AMD, which are essential for training large and complex AI models. It is also building more data centers to increase its computing power, allowing it to handle larger workloads and support more advanced AI systems. xAI also plans to hire additional top AI researchers and engineers to strengthen its team and improve its ability to compete with other leading AI labs.
At the same time, a major part of this newly raised capital is said to be going toward the development of a massive supercomputer called Colossus, which is being built in Memphis, Tennessee. The system is said to currently run on about 200,000 GPUs, but the company plans to scale it up to one million GPUs. The firm also reportedly plans to allocate around $18-$20 billion for data center development, following an initial $2.6 billion spent on capital expenditures.
Meanwhile, the significant rise in xAI’s value is especially notable because only a few months ago, the company was valued much lower. In July 2025, xAI completed a $10 billion fundraising round, structured through a combination of debt and equity. At that time, Morgan Stanley (which helped organize the deal) revealed that the package included $5 billion in secured debt (made up of term loans and convertible notes), along with $5 billion in equity investments from a group of institutional backers and strategic partners. That round brought the Musk-led company’s total funding to around $17 billion and gave the company an estimated valuation of around $75 billion. And now, just a few months later, its market value is reported to have nearly tripled in this latest fundraising round.
The latest funding follows xAI’s merger with X Corp under xAI Holdings Corp. In March 2025, the combined entity was valued at $113 billion, with xAI at $80 billion and X at $33 billion. Earlier in April 2025, reports emerged suggesting that Musk was in talks to raise up to $20 billion in new funding for the combined operations of X and xAI, as the companies face a significant debt load.
All this is happening at a time when the Musk-owned AI firm is reportedly expecting to generate $1 billion in revenue by the end of 2025 and over $13 billion annually by 2029. Despite a first-quarter EBITDA loss of $341 million, xAI projects turning profitable by 2027 with $2.7 billion in EBITDA, rising to $13.1 billion by 2029.
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