Musk's xAI Holdings Plans $200 Billion Funding Round to Boost Valuation

Recent reports indicate that Elon Musk's xAI Holdings is in talks with investors to secure $20 billion in funding. If successful, this would value the company at over $120 billion, making it the second-largest funding round in history, second only to OpenAI's $40 billion round last month. According to Bloomberg, these negotiations are in the "early stages."

Dealing with Debt 

Experts suggest that the funding would help alleviate the heavy debt burden of the social media platform X (formerly Twitter). The company reportedly pays as much as $200 million in debt interest monthly, with over $1.3 billion in annual interest payments at the end of last year. This financing would not only ease xAI's financial pressure but also help expand its presence in artificial intelligence and social media.

With funding negotiations progressing, Musk is likely to attract investors who have previously backed his other ventures, including supporters of Tesla and SpaceX, such as Antonio Gracias of Valor Equity Partners and Luke Nosek of Gigafund. Gracias even plays a significant role in Musk's "Department of Government Efficiency."

Advances in AI

Investor interest is fueled by the growing appeal of artificial intelligence, particularly given Musk's increasing political influence. Since the Trump administration, Musk has become a prominent political figure.

So far, xAI has not responded to the funding plans. The successful raising of this capital would have a profound impact on the industry, especially in the current climate of intense AI enthusiasm.