Elon Musk’s xAI reportedly raises $15B in new funding as the startup accelerates its massive AI infrastructure buildout

Elon Musk’s AI startup xAI has closed $15 billion in a new funding round from investors, according to an exclusive report from CNBC, citing people familiar with the deal. However, it didn’t take long before Musk jumped on X to call the report “False.”

“Elon Musk’s artificial intelligence company xAI has raised $15 billion from investors, CNBC reported, citing sources familiar with the matter who told CNBC’s David Faber.

The confusion landed just weeks after Bloomberg reported that xAI was seeking $20 billion to build one of the largest AI data centers ever attempted, powered by Nvidia hardware. It also adds to the frenzy around AI valuations, which keep stretching higher as investors pour record sums into foundation-model startups.

CNBC previously said in September that xAI was raising $10 billion at a $200 billion valuation, and the new figure was described as an extension of that round. Sources also told the outlet that most of the cash would go straight into the GPUs needed to train large language models — an area Musk has been racing to scale.

Anthropic recently closed a $13 billion round that tripled its valuation, while OpenAI completed a $6.6 billion share sale at a $500 billion valuation and is reportedly preparing an IPO that could hit $1 trillion.

Rising scrutiny around xAI’s infrastructure push

Musk’s ambitious build-out hasn’t been without backlash. In Memphis, xAI is constructing massive data centers that run on natural-gas turbines — a move that local researchers say worsens air-quality problems.

The company also operates Grok, its chatbot, and Grokipedia, a crowdsourced encyclopedia positioned as a challenger to Wikipedia. Both have faced criticism for inaccurate output and, in some cases, the spread of anti-semitic and hateful material.

Tightening ties across Musk’s companies

The relationship between xAI, X, and Tesla keeps deepening.

• xAI bought X in March in an all-stock deal that valued the platform at $33 billion.

• Newer Tesla vehicles now ship with Grok embedded in their infotainment systems.

• xAI has purchased tens of millions of dollars’ worth of Tesla energy-storage systems to power its Memphis sites.

At Tesla’s shareholder meeting last week, investors approved a CEO compensation plan that could eventually award Musk close to $1 trillion in stock, depending on future milestones. A separate shareholder proposal that would have allowed Tesla to invest directly in xAI failed to secure enough votes, though executives said the company is still reviewing its options.

The merger question

Earlier this year, Musk said xAI would merge with X in an all-stock transaction valuing the AI startup at $80 billion. He continues to dismiss any idea of combining xAI with Tesla.

Still, Musk’s strategy is clear: build out enough compute to train frontier models at unprecedented scale. He has publicly stated he intends to buy up to one million GPUs from Nvidia and AMD to fuel the next generation of systems, anchored by an enormous supercomputer cluster rising in Memphis.

The road ahead

Money, attention, and momentum are all piling up around xAI. What’s less certain is whether the company’s recent controversies — from Grok’s misfires to the departure of hundreds of annotators — will slow its push to take on OpenAI, the company Musk once co-founded and later criticized for drifting away from its founding ideals.

For now, Musk is positioning xAI as a counterweight focused on transparency, scientific progress, and aggressive infrastructure expansion. Whether that’s enough to catch up to its rivals is the question investors are still trying to answer.