Musk’s xAI Aims for $20B Valuation—Because What’s Another Billion Between Friends?

Elon Musk’s latest venture, xAI Holdings, is courting investors with a staggering $20 billion valuation target. Because if there’s one thing Silicon Valley loves more than disruption, it’s overpriced hype trains.

The AI arms race just got a plutonium fuel injection—Musk’s play could either redefine the sector or become another case study in ’peak valuation’ folly. Either way, VCs will line up to write checks—their FOMO is stronger than their due diligence.

Fun fact: That $20B ask could buy 400,000 Tesla Cybertrucks. Just saying.

This funding would value the company at over $120 billion. Artificial intelligence startup xAI did not immediately respond to a request for comment from CNBC outside of U.S. business hours.

The amount of funding could exceed $20 billion, as the exact figure has not yet been finalized. Musk planned to assign a “proper value” to xAI, sources informed CNBC’s David Faber earlier this month.

These remarks were made during a call with xAI investors, as reported by sources knowledgeable about the matter. At that time, the Tesla CEO did not explicitly mention any upcoming funding round, but sources suggested that xAI was preparing for a significant capital raise soon.

Last month, the AI firm acquired X in an all-stock deal that valued xAI at $80 billion, while the social media platform was valued at $33 billion. XAI and X’s futures are intertwined.

Today, we officially take the step to combine the data, models, compute, distribution, and talent,” Musk stated on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.