Musk’s xAI seeks US$4.3b in new equity funding: Bloomberg
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The news: Elon Musk’s artificial intelligence startup xAI is in talks to raise USD4.3 billion ($6.9 billion) through an equity investment, Bloomberg reported citing information shared with investors.
The numbers: The new raise comes on top of the USD5 billion the company is trying to borrow from debt investors. Commitments for that debt sale are due Tuesday (Wednesday AEST), the news outlet reported citing an unnamed source.
xAI, the maker of the Grok chatbot, has already spent most of the USD14 billion it raised between its founding in 2023 and the launch of the debt sale this year, according to the materials shared with investors.
It only had USD4 billion left on its balance sheet as of 31 March.
According to Bloomberg, investors were told the company’s valuation rose to USD80 billion at the end of the first quarter, from USD51 billion at the end of 2024.
xAI may also receive a USD650 million rebate from one of its manufacturers that will help cut costs, Bloomberg said.
Separately, Musk’s X Corp sued New York, challenging the constitutionality of a new state law requiring social media companies to disclose how they monitor certain types of content.
The context: xAI was founded in 2023 and is behind the AI chatbot Grok. Musk recently merged xAI with X, his social media company, but the new funds are intended for AI operations, according to the report.
The equity raise is also reportedly helping attract investors to the debt offering, which has been amended to make it harder for xAI to shift assets and limit the amount of secured debt it can raise.
The source: Bloomberg
