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Elon Musk’s xAI is close to raising $15bn from investors in a deal that would value the artificial intelligence company at $230bn, double the value reached when it acquired the social platform X in March.
The new target was shared with investors in xAI by Musk’s wealth manager Jared Birchall on Tuesday night, according to people familiar with the matter, and investors now anticipate that Musk will rapidly raise the targeted amount.
A deal at $230bn would conclude a complex process during which xAI has replaced its chief financial officer and Musk, who also heads up Tesla and SpaceX, has repeatedly denied that his company was raising funds. It is unclear if the valuation is pre- or post- investment.
The start-up’s stock has been trading on the secondary market for upwards of $200bn in recent weeks, according to a person with knowledge of the matter.
In a separate deal, Valor Equity Partners, headed by Antonio Gracias, is aiming to raise between $15bn and $20bn in debt and equity to purchase chips on behalf of xAI, according to people familiar with that deal.
xAI and Valor did not respond to requests for comment.
The fundraising marks the third share sale in six months as the company races to build out the AI infrastructure needed to train and power its models and gain an edge over competitors such as OpenAI, Meta and Google. xAI was valued at $113bn in the deal to take over X in March.
In July, xAI raised $10bn through loans and cash investments to boost the build-out of its Colossus data centre in Memphis, Tennessee, and in June, it sold $300mn of shares in a secondary stock offering.
Musk on Wednesday said xAI planned to separately develop a 500 megawatt data centre in Saudi Arabia with the kingdom’s state-backed AI venture Humain, using chips from Nvidia.
After publicly falling out with US President Donald Trump, which put an end to his work leading a cost-cutting initiative for the federal government, Musk has refocused his attention on making xAI a central player in the AI arms race.
In particular, the billionaire entrepreneur is rapidly developing its chatbot Grok, a competitor to OpenAI’s ChatGPT, and integrating the models into his X social media platform as well as some of his Tesla vehicles.
Competing AI groups are also pouring billions of dollars into infrastructure projects. Anthropic is raising $15bn from Microsoft and Nvidia in a deal that is expected to value the AI start-up at more than $300bn. Many are also funding large data centre construction with debt rather than spending their cash reserves.
Musk has pushed the idea of Tesla investing in xAI. A nonbinding shareholder resolution at Tesla on the matter was voted on earlier this month, garnering 43 per cent of votes in favour, with 57 per cent voting against or abstaining. The board said it would “examine next steps in light of these voting results”.
xAI has experienced rapid turnover among its upper ranks in recent months, losing X chief executive Linda Yaccarino as well as the chief financial officers of both X and xAI. Last month, the Financial Times reported that Musk had appointed Morgan Stanley banker and close lieutenant Anthony Armstrong as its new finance chief.
The Wall Street Journal first reported news of the valuation.
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