Musk’s xAI in advanced talks to raise $15 billion at $230 billion valuation, WSJ reports

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(Reuters) -Elon Musk’s artificial-intelligence startup xAI is in advanced talks to raise $15 billion in fresh equity at a valuation of $230 billion, the Wall Street Journal reported on Tuesday.

The fundraising terms were outlined to investors by Musk’s wealth manager, Jared Birchall, on Tuesday night, the report said. It was not clear whether the valuation figure Birchall shared was pre- or post-money, the paper added.

Reuters could not immediately verify the report. Jared Birchall could not be immediately reached. XAI, in what seemed like an automated reply, said “Legacy Media Lies” in response to a Reuters request for comment.

The new valuation would more than double  xAI’s $113 billion mark disclosed when it merged with Musk’s social-media platform X in March.

Musk last week dismissed as “false” a CNBC report claiming xAI was raising $15 billion in a Series E round valuing the firm at $200 billion. The startup has been rapidly scaling its data-centre footprint to train more advanced models as it tries to close the gap with OpenAI’s ChatGPT and Anthropic’s Claude. xAI, launched in July 2023 as a rival to OpenAI, is also investing heavily in infrastructure, including property in Memphis, Tennessee, for its planned Colossus supercomputer.

Musk has previously floated the idea of using Tesla to back xAI, and Tesla shareholders approved an investment in the startup  earlier this month,  though a large number abstained.

Investor appetite for AI companies remains robust despite growing warnings of an AI bubble, fueled by soaring valuations and aggressive spending plans.

(Reporting by Rajveer Singh Pardesi in Bengaluru; Editing by Eileen Soreng and Nivedita Bhattacharjee)