Elon Musk’s xAI Secures $20 Billion in New Funding as Valuation Hits $230 Billion

$20 billion just flooded into Elon Musk's AI venture. xAI confirmed it raised a massive capital injection, far exceeding its initial $15 billion target. This round pushes the startup's valuation to approximately $230 billion, solidifying its position in the high-stakes AI arms race.

Strategic Backing from Tech Giants and Sovereign Wealth

According to CNBC and Reuters, the Series E round drew heavyweights like Nvidia and Cisco Investments. Long-time Musk backers including Valor Equity Partners, Fidelity, and the Qatar Investment Authority also joined. The inclusion of hardware giants like Nvidia and Cisco is notable, as both companies already serve as critical vendors for xAI's infrastructure.

Infrastructure Growth Amidst Controversy

Musk is heavily investing in the company's data center in Memphis, Tennessee. While essential for training large-scale models, the facility has drawn criticism from local residents and researchers due to emissions from its natural gas-burning turbines. Simultaneously, xAI faces regulatory scrutiny in Europe and Asia after its Grok chatbot was linked to the generation of non-consensual intimate imagery.

Despite these hurdles, xAI has secured a significant contract with the Department of Defense to integrate Grok into its AI agents platform. Grok is also increasingly becoming the preferred engine for decentralized prediction platforms like Polymarket. Following its merger with X in March 2025, xAI continues to leverage the social network's data to refine its foundational models.