Elon Musk's xAI just closed a staggering $15 billion funding round, adding another $5 billion to its September raise and cementing the AI startup's $200 billion valuation. The mega-round comes as Tesla shareholders weigh a proposal to invest company funds directly into Musk's AI venture, potentially tightening the ties between his electric vehicle empire and artificial intelligence ambitions.
Elon Musk's artificial intelligence startup xAI has secured a massive $15 billion funding round, sources familiar with the matter told CNBC's David Faber. The fresh capital adds another $5 billion to the company's September raise, maintaining its eye-watering $200 billion valuation.
The funding arrives at a pivotal moment for Musk's AI ambitions. Just last week, Tesla shareholders voted on a proposal that could see the electric vehicle giant invest company funds directly into xAI. Brandon Ehrhart, Tesla's general counsel, confirmed to investors that "there were more votes for than against," though he noted significant abstentions and said the company is "considering next steps on the issue."
Sources tell CNBC that much of xAI's war chest will flow directly into graphic processing units - the specialized chips that power large language models. It's a familiar playbook in today's AI arms race, where startups are spending billions on computational infrastructure to stay competitive.
The timing couldn't be better. AI startups have been commanding unprecedented valuations as investors chase the next breakthrough in foundational models. Anthropic closed a $13 billion round in September that nearly tripled its valuation from March, while OpenAI secured $6.6 billion in October at a staggering $500 billion valuation.
xAI, which Musk launched with the ambitious goal "to understand the true nature of the universe," now sits firmly in the upper tier of AI's financial hierarchy. The $200 billion valuation places it above most public companies, a remarkable achievement for a startup that's barely two years old.
But the Tesla connection adds a unique wrinkle to xAI's story. Unlike pure-play AI companies, xAI could potentially tap into Tesla's manufacturing expertise, vehicle data, and cash reserves. The proposed investment would create an unprecedented corporate structure where a public company directly funds its CEO's private AI venture.
Investors are betting that Musk's track record with Tesla and SpaceX translates to artificial intelligence. His companies have consistently pushed technological boundaries while scaling manufacturing and operations - skills that could prove crucial as AI moves from research labs to real-world applications.
