Elon Musk’s xAI Seeks $10B Funding at $200B Valuation Amid AI Sector Boom

Elon Musk's artificial intelligence venture xAI is pursuing a $10 billion funding round at a staggering $200 billion valuation, according to CNBC. The capital will primarily fuel data center expansion, with plans to stock facilities with Nvidia and AMD GPUs critical for next-generation AI development. A massive computing cluster under construction in Memphis underscores the company's infrastructure ambitions.

This marks xAI's second major fundraising effort in weeks, following a $10 billion debt and equity round at a $150 billion valuation. The startup previously secured $6 billion in December 2023, reflecting the voracious capital demands of large-scale AI operations. The MOVE aligns with sector-wide trends, as rivals Anthropic and OpenAI recently achieved valuations of $183 billion and $500 billion respectively through similar mega-rounds.

Controversy shadows xAI's progress, however, with its Grok chatbot generating backlash for inflammatory responses. The incidents highlight the challenges of deploying AI systems at scale while maintaining ethical guardrails.