Elon Musk's AI company xAI is reportedly seeking another major funding round, with talks centered on a valuation around $40 billion, according to The Wall Street Journal. If completed at that level, the round would mark a sharp rise from the company's current post-money valuation of $24 billion.
A new round after a large Series B
xAI hopes to raise several billion dollars in the new round. That would add to the $6 billion in Series B funding the company raised in May.
The reported valuation is notable because it would nearly double xAI's current post-money valuation of $24 billion. For a company Musk formed last year, that pace signals how quickly investors may be assigning value to its AI products, infrastructure and connection to X.
The talks are still described as reported talks. The source article does not say that the round has closed, name participating investors or give a final amount beyond several billion dollars.
Grok remains the center of xAI's product story
Soon after Musk formed xAI last year, the company developed its first model, Grok. Grok was built to power various features on Musk's social network, X.
That connection gives xAI a visible consumer surface through X, while the company has also moved into business-facing tools. xAI now offers an enterprise API, which points to a strategy beyond features inside the social network.
The basic product picture is therefore split across two paths:
- Grok on X: the model supports features on Musk's social platform.
- Enterprise API: xAI offers access for organizations that want to build with its technology.
The source article does not describe API pricing, customers or usage levels. What it does establish is that xAI has moved from developing Grok into offering an enterprise API while preparing its next generation of models.
Infrastructure is part of the pitch
xAI says it is training the next generation of Grok models on a massive cluster of 100,000 Nvidia GPUs. In AI, training infrastructure matters because larger model work depends on access to specialized computing resources.
The source does not provide performance claims for the next Grok models. It also does not compare the cluster with any rival system. Still, the reference to 100,000 Nvidia GPUs gives a concrete sense of the scale xAI says it is applying to its model development.
The company has also recently moved into OpenAI's old offices. The source does not attach strategic detail to that move, but it places xAI physically in space previously connected to one of the best-known names in AI.
X data is a major strategic thread
Musk often asserts that X's data gives xAI a substantial leg up compared to rivals. That claim sits at the center of how xAI's relationship with X is being framed.
This month, X changed its privacy policy to allow third parties, including xAI, to train models on X posts. The source does not describe user reaction, implementation details or any limits beyond that policy change.
For xAI, the importance is straightforward: X is both a distribution channel for Grok features and a potential source of training data under the changed privacy policy. That makes the connection between the social network and the AI company more than branding.
What the reported valuation suggests
A valuation around $40 billion would put xAI far above the $24 billion post-money valuation tied to its current position. Because the company raised $6 billion in Series B funding in May, the new talks suggest xAI may be moving quickly to secure more capital for product expansion and model training.
The source does not say when the round might close or whether the final valuation could change. It also does not state how the new money would be allocated.
What is clear from the reported details is that xAI is trying to scale several things at once: funding, Grok development, enterprise access, computing capacity and the use of X-linked data. Those pieces explain why a new multibillion-dollar round would matter beyond the headline valuation.