Elon Musk’s AI startup xAI is reportedly closing in on one of the largest funding rounds in the sector. According to the Wall Street Journal, the company is in discussions to raise $15 billion at a $230 billion valuation.
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More Details About the New Funding Round
This new valuation of $230 billion marks a sharp jump from the $113 billion valuation reported after xAI’s acquisition of X in March. Last week, Musk denied a CNBC story that said xAI had raised $15 billion and would be valued at $200 billion.
According to the latest report, Jared Birchall, Musk’s wealth manager, shared the fundraising details with investors. However, it wasn’t clear whether the valuation he mentioned was pre-money or post-money.
Additionally, Musk, who serves as Tesla’s (TSLA) CEO, has openly backed the idea of Tesla investing in xAI. At a recent shareholder meeting, Musk’s proposal received mixed reactions.
xAI’s Cash Burn Soars
Just like many AI startups, xAI is burning through cash as it races to train and refine its flagship Grok chatbot. These startups are building the foundations for what could become trillions in future AI spending, keeping them stuck in an almost nonstop cycle of fundraising.
xAI has been rapidly expanding its data-center operations to train more advanced AI models to catch up with OpenAI’s (PC:OPAIQ) ChatGPT and Anthropic’s (PC:ANTPQ) Claude. xAI is also investing heavily in infrastructure, including property in Memphis, Tennessee, where it plans to build its Colossus supercomputer.
The potential fundraising would cement xAI as one of the highest-valued players in the fast-moving AI race, further intensifying competition with its rivals.
Which AI Stock Is a Strong Buy, According to Analysts?
Although the above-mentioned AI companies are not publicly traded, investors can use TipRanks’ Stocks Comparison Tool to evaluate other companies in this sector. Click the image below to explore further.
