Elon Musk’s artificial intelligence company, xAI, is reportedly in advanced discussions to raise $15 billion in fresh equity funding. If completed, this deal could peg xAI’s value at about $230 billion, nearly double its last disclosed valuation.

The funding plan was laid out to investors by Jared Birchall, Musk’s long-time wealth manager, in what insiders described as a late-night pitch. This suggests that Musk is preparing to scale xAI into a direct challenger to OpenAI, Google DeepMind, Anthropic, and other major AI developers. However, it remains unclear whether the $230 billion figure represents a pre-money or post-money valuation.

People familiar with the matter say talks with investors have accelerated in recent weeks. Key discussions are said to involve sovereign wealth funds, major institutional investors, and large tech-focused venture firms. If completed, the raise would mark one of the largest single funding rounds for an AI startup to date.

This development comes just days after Musk attended President Donald Trump’s black-tie dinner for Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, on Tuesday night.

The event marked his first return to the White House since stepping down in May from his role as a special government employee overseeing the Department of Government Efficiency (DOGE).

Musk had publicly feuded with Trump after his departure, but his attendance at the dinner is being viewed as a sign that tensions between them may be easing, especially as Musk’s earlier threat to launch a breakaway “America Party” appears to have lost momentum.

xAI scaling ambitions amid an intensifying AI race

Launched in 2023 – after a fallout with his co-founders at OpenAI – as a research lab aimed at creating what Musk calls “maximally curious” artificial general intelligence. Since then, the company has moved quickly, debuting its Grok chatbot and acquiring talent from several leading tech firms.

If the deal goes through, it would represent a bold step for xAI, which has been aggressively scaling its infrastructure to compete with AI heavyweights like OpenAI and Anthropic. The company has already been building out its data centre footprint, particularly in Memphis, Tennessee, where it plans to host its Colossus supercomputer. 

This latest move follows a previous $10 billion raise earlier in 2025. In that round, xAI secured $5 billion in equity and $5 billion in debt, with SpaceX contributing $2 billion. That capital was earmarked for infrastructure and AI model development, laying the groundwork for xAI’s rapid growth.

The financing effort comes at a time when investment in artificial intelligence continues to surge, with companies racing to develop advanced models that can power next-generation applications in search, robotics, automation, and enterprise software.

Notably, in October, xAI named Anthony Armstrong, a former Morgan Stanley banker who advised Musk on prior deals, as its new Chief Financial Officer. Armstrong is said to be taking charge of financial operations for both xAI and Musk’s social media platform, X.

xAI has positioned itself as a mission-driven alternative to the more established AI labs. Musk has repeatedly voiced concerns about what he sees as excessive censorship, opaque decision-making, and the political influences shaping today’s AI systems. His pitch to investors leans heavily on the need for AI systems that prioritise truthfulness, transparency, and safety.

Industry analysts say the timing of the raise is significant. Demand for powerful AI models has exploded across consumer services, enterprise software, and cloud infrastructure. Meanwhile, governments worldwide are drafting new regulations to govern AI systems, forcing technology companies to navigate a rapidly shifting landscape.