Elon Musk’s AI company, xAI, has successfully closed a $10 billion funding round, split evenly between $5 billion in debt (secured notes and term loans) and $5 billion in strategic equity investments, according to Morgan Stanley. This capital injection will be used to expand xAI’s AI infrastructure, including building one of the world’s largest data centers and advancing its flagship AI chatbot, Grok.
xAI has already deployed 200,000 GPUs at its Colossus supercomputer facility in Memphis, Tennessee, and plans to build a new facility housing 1 million GPUs near Memphis to support its AI development. The company aims to compete with major AI players like OpenAI and Anthropic, with Grok being integrated into Elon Musk’s social media platform X (formerly Twitter) to boost adoption.
This latest round follows a $6 billion raise in December 2024, bringing xAI’s total capital raised to about $17 billion. The funding round was oversubscribed and attracted prominent global debt investors, reflecting strong confidence in xAI’s vision and growth potential in the competitive generative AI market.
The $10 billion funding will significantly bolster xAI’s capacity to develop cutting-edge AI technologies and infrastructure to rival leading AI companies.