Report: New Valuation Push for Elon Musk’s xAI
After spending much of his time and energy this year as head of the Department of Government Efficiency (DOGE), could Elon Musk be pivoting to refocus on his businesses?
Sources familiar with an xAI investor call last week told CNBC Monday (April 21) that Musk was on the call and is seeking to establish a “proper valuation” for his artificial intelligence (AI) startup.
Although Musk, who was a co-founder of AI pioneer OpenAI, did not formally announce a capital funding round for xAI, the sources for the CNBC report think that is coming soon.
The sources also said a $1 billion potential run rate figure was mentioned on the call.
CNBC said the investor call took place just months after reports that xAI was seeking to secure up to $6 billion at a $50 billion valuation, with the funding reportedly coming from Middle Eastern sovereign wealth funds and backing from global investors. That capital was earmarked for acquiring 100,000 Nvidia chips, CNBC said, a key component in the company’s AI infrastructure.
xAI recently merged with the Musk-owned social media platform X in an all-stock deal. PYMNTS reported that he valued xAI at $80 billion and X at $33 billion.
Founded in July 2023, xAI launched the chatbot Grok last year to compete with other leading AI chatbots, including Anthropic’s Claude and OpenAI’s ChatGPT. The CNBC report said that at the time, xAI touted that Grok’s real-time internet knowledge enabled it to launch with just two months of training.
PYMNTS reported in March that xAI and Nvidia joined a $30 billion AI Infrastructure Partnership backed by BlackRock, Microsoft, and Abu Dhabi AI investment group MGX, with the ultimate goal to raise up to $100 billion for AI development. The partnership aims to build the next generation of AI-ready data centers and support the escalating demands of generative AI models.
The CNBC report also noted that Tesla, where Musk is CEO, experienced a 40% decline in shares this year and could raise questions about his management bandwidth.
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