Elon Musk’s xAI Raises $10B to Accelerate AI Infrastructure and Grok Development

Elon Musk’s artificial intelligence startup xAI has locked in a staggering $10 billion in new funding, combining both debt and equity to fuel its next wave of expansion. The funding was confirmed Monday by Morgan Stanley, which played a key role in structuring the deal.

According to the firm, xAI raised $5 billion through debt and another $5 billion via a strategic equity round. This hybrid approach not only helps reduce the overall cost of capital but also gives xAI access to a broader network of investors. The fresh capital will support major infrastructure efforts — including plans for one of the largest AI data centers globally — and accelerate development of its conversational AI platform, Grok.

The deal follows a $6 billion equity round closed in December, which featured heavyweight backers like Nvidia, AMD, Andreessen Horowitz, Sequoia Capital, Fidelity, BlackRock, and Saudi Arabia’s Kingdom Holdings. With this latest injection, xAI has now raised approximately $17 billion — a funding level that puts it in rare company within the fast-moving AI race.

xAI’s momentum comes as Musk seeks to position the company as a direct competitor to OpenAI, Anthropic, and other major players building next-gen AI systems. While the company hasn’t offered comment yet, this funding milestone suggests that Musk’s vision for an independent, vertically integrated AI alternative is gaining serious traction among investors.

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