Elon Musk’s AI company, xAI, is reportedly targeting a valuation between $170bn and $200bn in its next funding round.
This potential valuation comes amidst discussions with Saudi Arabia’s Public Investment Fund (PIF), according to sources cited by the Financial Times. The sovereign wealth fund holds an indirect stake in xAI through Kingdom Holdings’ $800m investment.
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However, the discussions are at a preliminary stage and subject to adjustments.
Despite these reports, Musk stated on the social media platform X that xAI is not actively seeking additional funding. Musk asserted that the company has plenty of capital.
Meanwhile, a fresh report has emerged that another venture of Musk, SpaceX, is planning to invest $2bn in xAI. This is part of a $5bn equity funding round, according to The Wall Street Journal. This move further intertwines Musk’s ventures, including SpaceX, Tesla, and X.
In June 2025, Morgan Stanley announced that xAI secured $5bn through debt issuance, accompanied by an equivalent amount in a strategic equity investment. These funds are intended to bolster xAI’s AI infrastructure through expanded data centres amid increasing competition in the sector.
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By GlobalDataEarlier in 2025, xAI acquired Musk’s social media platform X, formerly known as Twitter. The acquisition X at $33bn while pegging xAI at $80bn.
This merger enabled the integration of xAI’s Grok chatbot into various applications such as Starlink support and potentially into Tesla’s Optimus robots in the future.
In late May, xAI reportedly forged a partnership with Telegram to incorporate the Grok chatbot across all the apps of the messaging service. Under this agreement, xAI will compensate Telegram with $300m through cash and equity while sharing half of any subscription revenue generated via the platform.
Overall, financial projections from Morgan Stanley suggest that xAI could achieve over $13bn in annual earnings by 2029, as per a report in Bloomberg News. By the end of 2025, the AI company is anticipated to generate $1bn in gross revenue while allocating $18bn for investments in data centre expansion.
