Is Elon Musk’s xAI really worth USD 200 billion?

Launched in 2023, xAI aims to push artificial intelligence beyond chatbots, building reasoning models capable of solving scientific problems, advancing human knowledge, and powering applications across text, images, and search. Ambitious indeed. Perhaps some of the greatest inventions begin with audacity.

For instance, xAI’s flagship product, Grok, is integrated into Elon Musk’s social platform X, competing directly with OpenAI’s ChatGPT and Google’s Gemini. xAI is also working on multimodal AI, text-to-image models, and advanced search, with a team that includes alumni from DeepMind and OpenAI.

The USD 10 billion funding rumour

Going by media chatter, reports claimed that xAI was raising USD 10 billion at a USD 200 billion valuation, one of the largest private AI funding rounds ever. However, Musk dismissed the reports as “fake news,” insisting xAI is not raising capital now. Nevertheless, the contradiction has triggered a debate: are the rumours insider leaks or simply a marketing strategy to boost xAI’s posture in an increasingly crowded AI market? Let's dig in.

Who could invest?

If the raise were real, potential investors could include sovereign wealth funds such as Qatar Investment Authority and Kingdom Holding Company of Saudi Arabia, alongside top-tier venture capital firms. Such backing would give xAI deep pockets and global reach. 

Why the hype matters

Even without confirmation, the speculation underscores sky-high expectations for Musk’s AI venture. Unlike rivals chasing incremental gains, xAI presents itself as building “truth-seeking” AI with explainability and reasoning at its core—an ambition that requires vast compute resources and, logically, multi-billion-dollar funding.

The bigger picture

Whether or not the USD 10 billion deal exists, the episode shows how AI startups thrive as much on narrative as on technology. For Musk, even speculation works as a signal to investors and rivals: xAI wants to be seen as a frontrunner in shaping the future of artificial intelligence. 

(Note to readers: The claim that xAI raised $10B at a $200B valuation was first reported by CNBC. The company and Elon Musk have not confirmed this figure as of publication.)