Elon Musk’s artificial intelligence company xAI is seeking to raise $4.3 billion through equity investment, Bloomberg News reported on Tuesday, citing information shared with investors.
The new funding is in addition to a $5 billion debt sale already in progress.
The company, which launched in 2023, has raised $14 billion in equity financing up to the start of this year’s debt sale. xAI is reportedly looking for more funding due to the high costs of developing AI systems and having spent most of its earlier capital.
The company faces rising expenses linked to hardware, computing power, and skilled staff. It also expects a $650 million rebate from one of its manufacturers, which may help reduce costs.
Morgan Stanley is managing the debt offering. Commitments for the $5 billion debt sale are due Tuesday, according to a source cited by Bloomberg.
xAI, which acquired the social media platform X earlier this year, was valued at $80 billion at the end of the first quarter, up from $51 billion at the end of 2024.
Rival OpenAI announced plans in March to raise up to $40 billion at a $300 billion valuation in a round led by SoftBank Group. Musk, who co-founded OpenAI in 2015, left its board in 2018.
