Elon Musk’s artificial intelligence startup xAI is reportedly in talks to secure $4.3 billion in equity funding, on top of its existing debt funding plans valued at $5 billion. This new investment would bring the company’s total fundraising efforts to $19.3 billion since its founding in 2023.
The high costs associated with developing and deploying advanced AI systems are a major factor in xAI’s need for additional funding. The company has already spent most of its previously raised funds, according to sources, citing intensive hardware requirements, skilled employee needs, and a highly competitive market.
xAI’s financial projections indicate that it expects to burn through around $13 billion by the end of 2025, with $1 billion monthly expenditures reflected in its levered cash flow. The company’s valuation has also increased significantly, reaching $80 billion as of the first quarter of this year.
Notably, xAI may receive a $650 million rebate from one of its manufacturers to help reduce costs. This news comes amidst rival OpenAI’s recent funding round, which secured up to $40 billion at a $300 billion valuation led by SoftBank Group.
Source: https://www.reuters.com/business/musks-xai-talks-raise-43-billion-equity-funding-bloomberg-news-reports-2025-06-17