Elon Musk's Xai Reportedly Snags Backing From Dozens Of PE Investors At Jaw-Dropping $113B Valuation

Elon Musk's artificial intelligence (AI) venture xAI has reportedly received more financing from private venture capital firms and other investors.

The New York Times reported, citing internal documents, that xAI employees would offload some of their holdings through a tender offering in favor of TPG, Cathie Wood-run Ark Invest, and Sequoia Capital. 

Together, the two dozen firms have invested $250 million in xAI, which also owns the X social-media platform bought by Musk in 2022 for $44 billion. 

Many investors in the tender offer have previously invested in Mr. Musk's companies, including the electric vehicle manufacturer Tesla and the rocket company SpaceX. 

The report said Fidelity, which has invested in Musk's companies, has bought an equity stake worth $20 million. Small Bay Area firm Human Capital has also participated in the funding. 

According to the documents, the NYT reported that the financing deal valued xAI at $113 billion.

The report said the new funding round is separate from a previous one in which investors committed to plow $20 billion in xAI. 

Earlier this week, a Reuters report said research firm Morgan Stanley was marketing for the sale of $5 billion in bonds and two loans on behalf of xAI. 

The report also said Musk was looking to raise funds for xAI in late March when the company acquired X. The acquisition, structured as an all-cash transaction, valued xAI at $80 billion and X at $33 billion. 

AI companies have huge capital needs due to the need to invest in hardware and infrastructure. xAI is building a massive supercomputer at its Memphis facility for AI training. 

xAI's in-house large-language model (LLM) is Grok. The latest iteration, Grok 3, launched in February.

Earlier this week, Sulaiman Khan Ghori, a technical staff with xAI, posted about hiring at the company.“Hiring engineers at @xai  to help build our Mac product,” he said in the post. 

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