Elon Musk’s AI startup, xAI, is aiming to raise another $4.3 billion through an equity offering on top of the $5 billion in debt financing it has already been trying to secure. According to investor materials that were reviewed by Bloomberg, xAI has reportedly used up much of the funding it previously raised. Indeed, the company, which created the chatbot Grok, had raised $6 billion at a $50 billion valuation in order to build a massive data center in Memphis powered by 100,000 Nvidia (NVDA) H100 GPUs.
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In addition, earlier this year, xAI acquired Musk’s social media platform, X, in an all-stock transaction, which brought xAI’s valuation to $113 billion. This led to a separate $300 million share sale that brought in new investors. This new push for capital comes as Musk shifts his focus back to managing his companies after recent political distractions.
Looking ahead, xAI is projected to generate $13 billion in annual earnings by 2029, according to materials shared by its banker, Morgan Stanley (MS). Musk even proposed that Tesla should consider investing $5 billion in xAI after two-thirds of voters in an online poll supported the idea. While xAI did not respond to media inquiries, it is clear that the company is raising funds aggressively in order to fuel its aggressive growth plans.
What Is the Prediction for Tesla Stock?
When it comes to Elon Musk’s companies, most of them are privately held. However, retail investors can invest in his most popular company, Tesla (TSLA). Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $286.14 per share implies 11.2% downside risk.
