Elon Musk's xAI Holdings is on the verge of raising a record $20 billion, second only to OpenAI.
Elon Musk wants to increase the amount of money invested in his AI company, xAI, by about $20 billion. Elon Musk may use the new funding round to pay down the debt he accrued when he acquired Twitter, which he later rebranded as X after going private, according to a Bloomberg report.
Ankush Pandey
Highlights
- Negotiations are underway to raise $20 billion for Elon Musk's xAI Holdings.
- The Bloomberg report estimates that this deal would value the company at over $120 billion.
- Musk's deal could make it the second-largest fundraise after the $40 billion raised by OpenAI.
Elon Musk's xAI Holdings is reportedly in negotiations with investors to raise an extra $20 billion for xAI, his recently merged artificial intelligence and social media platform. As per the Bloomberg report, Musk may utilize this new investment to pay down the debt he accrued during his acquisition of Twitter, which he subsequently renamed X after going private.
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If Musk is successful, this could be the "second-largest startup funding round of all time" after OpenAI. According to data firm PitchBook, OpenAI raised $40 billion earlier this year.
According to the report, the deal would value the company at more than $120 billion. Additionally, it mentioned that the round's total could exceed $20 billion, but that the terms were still subject to change.
X, formerly known as Twitter, and xAI, Elon Musk's artificial intelligence startup, merged in March to become xAI Holdings. According to one source, as reported by Bloomberg, Musk may use some of the expected funding to pay down the large debt he accumulated when he took Twitter private and rebranded it as X.
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As previously noted by Bloomberg, X is now facing a substantial financial burden as a result of this debt. The business is reported to have paid about $200 million in takeover-related servicing expenses in March alone. An estimated $1.3 billion in interest payments per year could be made by the end of 2024.
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Musk and his team have been discreetly approaching possible investors since the merger to see if they would be interested in backing the newly established company. With the aim of raising money over the next few months, the funding talks are still in their early phases.
This upcoming funding round's size is indicative of both the robust investor interest in AI ventures and Musk's clout as a well-known businessman and political figure. Musk, a close friend of former President Donald Trump, has been instrumental in establishing policy and placing important allies in high-level government positions since Trump's ascent to power, though it is anticipated that he will soon leave Washington.
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