xAI Aims for $20 Billion in Funding, Second Only to OpenAI
Elon Musk's xAI is reportedly in talks to secure a massive $20 billion funding round. This potential investment could value the artificial intelligence company at over $120 billion, according to a Bloomberg report. The deal, if successful, would be the second-largest startup funding round ever, just behind OpenAI's $40 billion raise in March 2025.
Funding to Address Debt and Fuel AI Development
The influx of capital could significantly reduce xAI's substantial debt burden. Bloomberg sources indicate the company faces $200 million in monthly debt servicing fees, with annual interest expenses exceeding $1.3 billion by the end of last year.
This substantial investment underscores the continued strong investor interest in artificial intelligence. It also highlights Musk's growing influence in the tech and political landscapes.
Familiar Investors Likely to Participate
Musk is expected to draw investment from long-time backers of his various ventures, including Tesla and SpaceX. These include Antonio Gracias of Valor Equity Partners and Luke Nosek of Gigafund. Gracias also serves in Musk's Department of Government Efficiency.
xAI has not yet commented on the reported funding round.
