Elon Musk’s xAI Holdings is reportedly engaging with potential investors to secure around $20 billion in funding for his newly unified artificial intelligence and social media enterprise, according to sources familiar with the discussions. If finalized, this fundraising round would rank as the second-largest ever for a startup, following only OpenAI’s $40 billion raise earlier this year, according to PitchBook. The deal would push the valuation of Musk’s new company to over $120 billion, one of the sources indicated, though all requested anonymity due to the sensitive nature of the talks.
Established in March, xAI Holdings was formed through the merger of Musk’s AI initiative, xAI, and X—formerly known as Twitter. Some of the funds raised may go toward addressing debt Musk assumed when he took Twitter private and rebranded it as X, one insider revealed.
That financial burden has heavily impacted X, as previously reported. In March alone, the company spent roughly $200 million servicing its acquisition-related debt. By the end of 2024, its yearly interest payments are projected to exceed $1.3 billion.
Since merging the two ventures, Musk and his team have been quietly gauging investor interest in supporting the newly structured firm, said several individuals close to the matter. While the funding discussions are still in early stages, the company intends to secure the capital over the coming months.
One source noted that the funding goal could exceed the initial $20 billion figure, though final terms and the total amount are still being negotiated and may change as talks progress.
The scale of the planned raise reflects both the strong investor demand for AI-focused companies and Musk’s enduring reputation as a powerful figure in both business and politics. Known as a close ally of former President Donald Trump, Musk has exerted notable influence in Washington, placing loyalists in key government roles since Trump’s rise.
Despite recent declines in Tesla Inc.’s stock performance, Musk’s privately held ventures continue to surge in value. For instance, SpaceX became the most valuable startup in history after a private deal last year valued it at $350 billion.
