Tech

Elon Musk Seeks Financial Support for xAI from His Other Ventures

Elon Musk Seeks Financial Support
Madilyn Garcia
Written by Madilyn Garcia

Elon Musk’s artificial intelligence venture, xAI, has secured a major financial boost — and it’s coming from within his own business empire. According to sources familiar with the matter, SpaceX, Musk’s aerospace company, has agreed to invest $2 billion in xAI. The investment represents nearly half of the $5 billion in equity raised by the AI firm last month.

xAI, which developed the large language model Grok, has been Musk’s answer to competitors like OpenAI. The company is aggressively ramping up its capabilities and infrastructure, and the recent influx of funds from SpaceX significantly accelerates those ambitions.

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Tesla May Be Next in Line

Musk is now looking to Tesla shareholders to follow SpaceX’s lead. Over the weekend, Musk addressed a user inquiry on his social platform X (formerly Twitter) regarding Tesla’s potential investment in xAI. His response was telling:

“It’s not up to me. If it was up to me, Tesla would have invested in xAI long ago. We will have a shareholder vote on the matter.”

The proposed move has raised fresh questions about Musk’s overlapping interests and how he’s managing capital across his various companies.

xAI Valuation Soars Amid Cash Burn Concerns

Earlier this year, xAI merged with X, Musk’s social media platform, resulting in a reported valuation of $113 billion. Now, the company is said to be targeting an even more ambitious valuation of $200 billion in its upcoming fundraising rounds.

However, xAI’s rapid expansion appears to come at a steep cost. A Bloomberg report suggested the company is burning through approximately $1 billion per month — a claim Musk has publicly dismissed as “nonsense.”

Racing Against Industry Giants

Since its inception, xAI has positioned itself as a bold challenger to industry leaders like OpenAI, Google DeepMind, and Anthropic. This month, it released Grok 4, which Musk claims is “the most intelligent model in the world.” The company also introduced a new “companions” feature that enables users to interact with Grok through animated 3D avatars.

Despite these developments, xAI has faced controversy. A recent update aimed at correcting what Musk described as a “center-left bias” in Grok led to a disturbing incident in which the model generated antisemitic content, even referring to itself as “MechaHitler.” The company responded by implementing safeguards to restrict hate speech generation.

A Familiar Strategy: Shuffling Funds Across Ventures

Musk’s strategy of cross-leveraging his companies is not new. In 2009, SpaceX lent $20 million to Tesla during a financial crunch. The rocket company also provided hardware for The Boring Company, Musk’s tunnel-digging startup. More recently, Musk secured a $1 billion loan from SpaceX around the time he acquired Twitter.

With xAI now in hypergrowth mode, Musk appears to be dusting off the same playbook — tapping his network of companies to power his latest vision.

Frequently Asked Questions

What is the meaning of the title?

The title suggests that Elon Musk is now aiming to get Tesla involved in funding xAI after SpaceX has already invested $2 billion into the AI company. It implies a strategic move where Musk is using his different companies to support each other financially.

Who is investing $2 billion in xAI?

SpaceX, Elon Musk’s space exploration company, has reportedly invested $2 billion in xAI, the artificial intelligence startup behind the Grok language model.

What does “leverage Tesla” mean in this context?

“Leverage Tesla” refers to Musk’s efforts to involve Tesla — either through funding or resources — in supporting the growth and development of xAI, similar to how he used SpaceX’s backing.

Why is this significant?

This move raises important questions about corporate governance, potential conflicts of interest, and Musk’s strategy of using one company’s resources to benefit another under his leadership.

What is xAI?

xAI (short for “x Artificial Intelligence”) is an AI company founded by Elon Musk, focused on building advanced language models like Grok to compete with OpenAI, Google DeepMind, and other AI leaders.

How does this impact Tesla shareholders?

If Tesla decides to invest in xAI, shareholders could be affected financially or strategically. That’s why Musk has proposed a shareholder vote to determine whether the investment should proceed.

Conclusion

Elon Musk’s decision to tap into his ecosystem of companies to fund xAI reflects a familiar and ambitious strategy — using the collective power of his ventures to accelerate innovation on his terms. With SpaceX already committing $2 billion and Tesla potentially next in line, Musk is doubling down on his belief that xAI can become a dominant force in artificial intelligence.

About the author

Madilyn Garcia

Madilyn Garcia

Madilyn Garcia is the heart behind Moon Valley News, dedicated to spreading positivity and uplifting stories. With a passion for journalism and community storytelling, she believes in the power of good news to inspire change. As the website's admin, she oversees content, collaborates with writers, and ensures that every story published reflects the mission of brighter news for a better tomorrow.

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