xAI Raises $20 Billion in New Funding Round

Elon Musk’s xAI announced that it raised $20 billion in a new funding round that topped its earlier goal of $15 billion. In addition, it was previously reported that the financing would value the artificial intelligence startup at around $230 billion. Notably, the funding round included several high-profile investors, such as Nvidia (NVDA) and Cisco (CSCO), along with long-time Musk backers such as Valor Equity Partners, StepStone Group (STEP), Fidelity, Qatar Investment Authority, Abu Dhabi’s MGX, and Baron Capital Group.

Nvidia and Cisco also work closely with xAI as vendors and strategic partners. Unsurprisingly, the deal comes after competitors like OpenAI and Anthropic also raised large sums of money that allowed them to reach valuations of roughly $500 billion and $183 billion, respectively, thanks to backing from Microsoft (MSFT) and Nvidia.

However, it is worth noting that the startup is facing increased scrutiny from regulators in Europe, India, and Malaysia after its Grok chatbot generated sexualized images of children and non-consensual images of adults that spread widely on X. Meanwhile, xAI is building out its infrastructure in Memphis, Tennessee, where data centers powered by natural gas turbines have raised concerns among local residents and researchers, who say emissions may be contributing to air quality problems in the area.

What Is the Prediction for TSLA 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 13 Buys, nine Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $393.89 per share implies 8.8% downside risk.

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