Elon Musk is reportedly working to establish a formal valuation for his artificial intelligence startup, xAI, as the company explores new funding opportunities. According to sources cited by CNBC, Musk joined an investor call last week where he discussed positioning xAI for future growth and mentioned a potential $1 billion revenue run rate. Although no official funding round was announced during the call, sources believe that raising capital could be the next step for the company.
This development follows earlier reports that xAI was seeking up to $6 billion in funding at a $50 billion valuation, with investments expected from Middle Eastern sovereign wealth funds and other international backers. The planned capital would be used to acquire around 100,000 Nvidia chips, which are crucial for supporting the company’s AI infrastructure and development goals.
Founded in July 2023, xAI has quickly entered the competitive AI landscape with the launch of its chatbot Grok, designed to challenge existing AI tools like OpenAI’s ChatGPT and Anthropic’s Claude. xAI promotes Grok’s ability to provide real-time internet-based answers with minimal training time, highlighting its rapid development approach.
The company also recently completed an all-stock merger with X, Musk’s social media platform, with reported valuations of $80 billion for xAI and $33 billion for X. Additionally, xAI has partnered with Nvidia and joined a $30 billion AI Infrastructure Partnership alongside BlackRock, Microsoft, and Abu Dhabi’s MGX, aiming to raise up to $100 billion for building advanced AI-ready data centers to meet the growing needs of generative AI technologies.
These ambitious moves come at a time when Musk faces scrutiny over his commitments across multiple ventures, including Tesla, which has seen its shares fall by 40% this year. The renewed focus on xAI suggests Musk may be looking to shift attention back toward his core businesses as the demand for AI innovation continues to rise.
