xAI is gearing up for, what could be, one of the biggest funding rounds in the artificial intelligence sector, reportedly aiming to raise $15 billion. The round is expected to value the Elon Musk-led venture at an eye-popping $230 billion, reports The Wall Street Journal. If the raise goes through at this valuation, it would more than double xAI’s estimated worth from earlier this year, following its merger with X. Investors from both tech and finance sectors are said to be in advanced talks, reflecting strong confidence in Musk’s vision, even as the company faces skepticism and mounting debt pressure.
To counter growing claims that it is falling behind the biggest players like OpenAI and Anthropic, xAI is aggressively accelerating its push into large-scale AI infrastructure – an effort that demands massive financial backing. The company is racing to expand its computing muscle, anchored by plans for a high-performance supercomputer in Memphis, Tennessee, internally referred to as Colossus. The system is being designed to support the immense workload of next-generation AI models, which demand tens of thousands of GPUs working in tight coordination. And clearly, this huge hardware buildout is not possible without a multi-billion-dollar investment.
The AI upstart has also been quietly expanding its team, attracting talent from top AI labs and research institutions. xAI previously raised a combination of equity and debt, including a reportedly significant contribution from Musk’s other venture, SpaceX, which is said to have invested around $2 billion. The latest funding chatter also lands just as Musk recently referred to a media claim that xAI is seeking $15 billion in a Series E round at a $200 billion valuation as ‘false’.
xAI and other AI heavyweights are chasing massive investment because the AI space is no longer limited to smart software, but now also demands gigantic infrastructure. But at the same time, investors are starting to worry about a potential AI bubble, as valuations and investment across the industry keep skyrocketing while actual revenues have not caught up. On xAI’s part, the firm is reportedly expecting to generate $1 billion in revenue by the end of 2025 and more than $13 billion annually by 2029. The company recorded a first-quarter EBITDA loss of $341 million but projects turning profitable by 2027 with $2.7 billion in EBITDA, rising to $13.1 billion by 2029. Along with finances, legal scrutiny and controversies have also become major challenges for xAI. The company is already involved in lawsuits against other tech giants, including Apple and OpenAI.
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