Elon Musk's xAI Company Secures $10 Billion Funding, Valuation Surpasses $200 Billion

According to a recent report, Elon Musk’s artificial intelligence company, xAI, has successfully secured USD 10 billion in its latest funding round, pushing the startup’s valuation to approximately USD 200 billion. This round of financing marks one of the largest capital injections for an AI startup and positions xAI among the world’s most valuable private companies. Source: Bloomberg.

The newly raised funds are expected to be primarily allocated to expanding the company’s technological and research capabilities. xAI is purchasing advanced chips from Nvidia and AMD, which are essential for training large and complex AI models. Additionally, the company is constructing more data centers to boost its computational capacity, enabling it to handle larger workloads and support more sophisticated AI systems. xAI also plans to recruit top-tier AI researchers and engineers to strengthen its team and enhance its competitiveness against leading AI labs.

At the same time, a significant portion of the newly acquired capital will reportedly be used to develop a massive supercomputer named Colossus, currently under construction in Memphis, Tennessee. The system is said to be operating on approximately 200,000 GPUs, with plans to expand it to one million GPUs. The company also intends to allocate between USD 18 billion and USD 20 billion toward data center development, following its previous capital expenditure of USD 2.6 billion.

Notably, xAI’s valuation has surged significantly, especially considering that just a few months ago, it was much lower. In July 2025, xAI completed a USD 10 billion fundraising round structured through a mix of debt and equity. At the time, Morgan Stanley, which helped organize the deal, revealed that the arrangement included USD 5 billion in secured debt (comprising term loans and convertible notes) and USD 5 billion in equity investments from a group of institutional supporters and strategic partners. That round brought the total funding for Musk’s company to approximately USD 17 billion and raised its valuation to around USD 75 billion. Now, only a few months later, its market value has nearly tripled, according to reports on the most recent funding round.

The latest financing follows the recent merger of xAI with X under the xAI holding company. In March 2025, the combined entity had a valuation of USD 113 billion, with xAI valued at USD 80 billion and X at USD 33 billion. As early as April 2025, reports indicated that Musk was in talks to raise up to USD 20 billion in new funding for the merged operations of X and xAI due to the companies’ significant debt burdens.

All of these developments come as Musk’s AI company is reportedly projected to generate USD 1 billion in revenue by the end of 2025 and exceed USD 13 billion annually by 2029. Despite a USD 341 million EBITDA loss in the first quarter, xAI expects to achieve profitability by 2027 with a USD 2.7 billion EBITDA and grow that to USD 13.1 billion by 2029.