From Yahoo Finance: 2025-06-17 09:44:00

Elon Musk’s AI startup xAI is seeking $4.3 billion in equity investment on top of $5 billion in debt funding. The company has already raised $14 billion through equity fundraising since its founding in 2023. Training advanced AI is costly due to hardware, compute, and skilled labor needs.

The Grok chatbot maker is seeking new funding after spending most of its previous raised funds. Morgan Stanley is handling xAI’s debt sale, while the company is expected to burn through $13 billion in 2025. Commitments for the debt sale are due Tuesday.

xAI may receive a $650 million rebate from a manufacturer to help cut costs. The company, which acquired X earlier this year, is now valued at $80 billion, up from $51 billion in 2024. Rival OpenAI plans to raise up to $40 billion at a $300 billion valuation led by SoftBank Group.

Elon Musk co-founded OpenAI in 2015 but left the board in 2018. xAI’s aggressive funding plans reflect the high costs and competitive nature of the AI market. Musk’s ventures continue to shape the AI landscape with significant financial backing and strategic partnerships.

Read more: Musk’s xAI in talks for $4.3 billion equity funding, Bloomberg News reports