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Elon Musk’s Xai is preparing to raise more funds for the AI company in a transaction that could reach $20 billion, according to people close to the consultation.
The fundraiser is under discussion and could officially start soon next month, making its third largest share sales within two months. It raised $10 billion in July through loans and cash investments, and in June it sold $300 million in shares in sales of secondary stock.
Additionally, Xai’s valuation will rise rapidly from the $18 billion set of Series B funding in May 2024.
This week, the company released its fourth model of Grok Chatbot, which will be posting on Musk’s social media platform X. It’s a few days after Bott repeatedly praised Adolf Hitler and shared anti-Semitic rhetoric on the platform. The company has pledged to ban hate speech from the post.
Three people close to the process said new funding will target valuations of between $170 billion and $200 billion. They warned that consultations were preliminary and details could change.
PIF, a Saudi Arabian sovereign wealth fund, is expected to play a major role in the transaction, the two said. PIF has an indirect interest in Xai through its interest in Kingdom Holdings Company, which invested $800 million in Xai.
Xai did not respond to requests for comment. PIF declined to comment.
Xai acquired X in all-stock trading for $45 billion in March. The transaction valued the total company at $113 billion. If the latest Xai fundraising is successful, it will grow to around $245 billion.
Another musk company, SpaceX, has been gaining value recently. Rocket and Satellite Group is preparing to sell roughly $1 billion in stock in a crucial deal this week for $400 million, Financial Times reported this week.
Musk companies, including Tesla and Brain Chip Company Neuralink, benefited from entrepreneurial ties with President Donald Trump after the November election.
Musk is one of Trump’s biggest backers and spent more than $250 million on his campaign, but last month’s official spat raised concerns about some blowbacks in his business.
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His private company values suggest that investors look past Trump’s risks targeting mask businesses. However, Tesla’s stocks have been in close to fifth place since the beginning of the year.
Xai was released in 2023 shortly after Openai released Chatbot ChatGpt. Musk was a co-founder of Openai in 2015, but left in 2018 and has since been a critic of the company and its chief executive, Sam Altman. Openai was valued at $300 million earlier this year as part of its fundraising.
Additional Reports by Hannah Murphy
