Elon Musk’s xAI Eyes $10B in New Funding at $75B Valuation

Elon Musk’s AI startup xAI is courting investors for a fresh $10 billion funding round that could value the company at $75 billion, according to multiple reports. The potential deal underscores xAI’s rapid ascent in the AI industry as it positions itself against OpenAI, Anthropic, and Google DeepMind.

Key Points:

• xAI is in discussions to raise $10 billion, which would push its valuation to $75 billion.
• Existing investors, including Sequoia Capital, Andreessen Horowitz, and Valor Equity Partners, are considering participation.
• Musk claims Grok 3, xAI’s latest chatbot, outperforms existing AI models and will launch soon.
• The company is reportedly negotiating a $5 billion AI server deal with Dell.

This latest fundraising effort follows xAI’s rapid capital accumulation. The company was valued at around $51 billion in December and raised $6 billion in a Series C round at the time. If successful, the new funding round would further solidify xAI’s position in the increasingly competitive AI landscape.

Elon Musk’s xAI Secures Another $6 Billion

The $6 billion raise involved 97 investors, with a minimum stake of $77,593.

MaginativeChris McKay

Musk has been vocal about xAI’s ambitions, particularly its flagship product, the Grok chatbot, which is integrated into X. Speaking at the World Governments Summit in Dubai, he claimed that Grok 3, xAI’s upcoming model, possesses superior reasoning capabilities compared to existing AI models and is expected to be released next week.

The release of Grok 3 is a big deal because it serves as a crucial test of the first scaling law—the idea that increasing pre-training compute leads to better performance. While companies like OpenAI, Anthropic, and Google DeepMind have steadily increased compute to train their models, they have been tight-lipped about their actual numbers.

However, we do know that Grok 3 represents a dramatic increase in compute infrastructure, leveraging an unprecedented 100,000 NVIDIA H100 GPUs. This makes it at least ten times more compute-intensive than Grok 2 and potentially larger in scale than any publicly known GPT-4-class model.

If Grok 3 delivers significantly improved reasoning and generalization abilities, it could reinforce the argument that sheer computational scale remains the dominant driver of AI advancements. However, if the results are underwhelming, it may signal diminishing returns, shifting industry focus toward more efficient architectures and test-time compute optimizations.

As for xAI, they are doubling down on infrastructure. The company is reportedly negotiating a $5 billion deal with Dell Technologies to acquire AI servers powered by NVIDIA hardware, a move that could significantly boost its computing capacity.

While Musk’s AI ambitions are accelerating, xAI still needs to prove that it can compete with models from OpenAI, Anthropic, and Google DeepMind.