Elon Musk’s xAI Holdings is currently negotiating a substantial funding round of $20 billion, which could elevate the company’s valuation to over $120 billion, as reported by Bloomberg. These discussions are in the early phases and, if successful, would mark the second-largest startup funding round in history, following OpenAI’s recent $40 billion raise.
Financial Implications of the Funding
This significant influx of capital would play a crucial role in addressing the considerable debt that xAI faces. Reports indicate that the company is incurring $200 million monthly in servicing costs, with annual interest expenses projected to exceed $1.3 billion by the end of the previous year.
Investor Interest in AI
A funding round of this magnitude would highlight the ongoing allure of artificial intelligence among investors. Furthermore, it signifies Musk’s unexpected rise as a significant figure in political conversations, particularly during the Trump administration.
Potential Backers
Musk is expected to engage with familiar investors who have historically supported his various enterprises, including Tesla and SpaceX. Notably, Antonio Gracias from Valor Equity Partners and Luke Nosek of Gigafund are likely candidates to partake in this funding effort. Gracias has been actively involved in Musk’s initiatives, serving as a lieutenant in his Department of Government Efficiency.
xAI has yet to provide any comments regarding the discussions.