Musk’s xAI secures $20bn in Series E funding round
Elon Musk’s xAI has raised $20bn in a Series E funding round, surpassing its earlier target of $15bn.
The funds will support the development of AI models and computing infrastructure, as well as research initiatives.
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The financing round saw participation from Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, and Qatar Investment Authority. Nvidia and Cisco Investments also joined as strategic investors, which xAI stated would help enhance its computing capabilities.
The new investment comes as xAI prepares to train its next-generation Grok 5 model. The company plans to utilise the capital for infrastructure expansion and faster AI product deployment.
Despite an initial report suggesting xAI was raising $15bn, Musk then denied this claim on X, previously known as Twitter.
Nvidia and Cisco also play roles as vendors and strategic partners with xAI.
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By GlobalDataDespite recent controversies surrounding its Grok chatbot, which led to regulatory investigations in Europe, India, and Malaysia due to inappropriate content generation, xAI has continued to expand.
The company recently secured a contract with the US Department of Defense, where Grok has been added to its AI agents platform. The AI model is also used in prediction betting platforms such as Polymarket and Kalshi.
The global demand for AI ventures remains high despite warnings of a possible market bubble. In 2025, AI startups experienced soaring valuations, with OpenAI reaching a valuation of $500bn after a share sale, while Anthropic was valued at around $350bn with backing from Microsoft and Nvidia.
xAI is also expanding its data centres in Memphis, Tennessee. This expansion aims to help the company catch up with competitors like OpenAI’s ChatGPT and Alphabet’s Gemini.
In July 2025, reports indicated that xAI was seeking a valuation between $170bn and $200bn for its next funding round.
Previously, in June 2025, Morgan Stanley revealed xAI had obtained $5bn through debt issuance matched by an equal amount in strategic equity investment to further bolster its infrastructure amid growing sector competition.
In early 2025, xAI completed the acquisition of Musk’s social media platform X. This merger has facilitated the integration of xAI’s Grok chatbot into applications such as Starlink support and potentially into Tesla’s Optimus robots.
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