Elon Musk’s artificial intelligence company xAI has raised $20 billion in a new funding round, surpassing its previous $15 billion target.
The funding round values xAI at around $230 billion. Musk previously called the $15 billion round “false” on his social media account X.
Investors include Nvidia, Cisco Investments, as well as long-time backers of Musk’s companies, Valor Equity Partners, StepStone Group, Fidelity, Qatar Investment Authority, Abu Dhabi’s MGX fund, and Baron Capital Group. Nvidia and Cisco are also working with xAI as technology partners and suppliers.
In 2025, AI startups attracted attention with record-high valuations. In October, OpenAI sold $6.6 billion worth of shares at a valuation of $500 billion, while in November, Anthropic was valued at around $350 billion.
xAI merged with Elon Musk’s social network X (formerly Twitter) in March, taking over the platform.
The company has also been embroiled in a series of scandals. xAI is facing regulatory scrutiny in Europe, India, and Malaysia over allegations that its chatbot, Grok, created sexually explicit images of minors and intimate photos of adults without consent. The materials were widely shared on the X platform.
Elon Musk is focusing xAI’s infrastructure development primarily in Memphis, Tennessee. The data centers, which use natural gas-fired power plants, have sparked protests from local residents — researchers say the emissions are having a negative impact on air quality in the area.
Despite all the controversy, xAI has signed a contract with the US Department of Defense, and Grok has already been included in the agency’s platform of artificial intelligence agents. The chatbot is also used as the main AI tool in prediction and betting platforms such as Polymarket and Kalshi.
