Elon Musk's xAI Holdings is reportedly negotiating with investors to secure approximately $20 billion in fresh funding for his newly merged artificial intelligence venture and social media platform, xAI. This investment would help Musk address the substantial debt he incurred during his $44 billion acquisition of Twitter, which was subsequently rebranded as X. According to a Bloomberg report, this round of funding could potentially be the second-largest startup funding round in history, behind only OpenAI’s $40 billion funding earlier this year.
The new investment could value xAI Holdings at over $120 billion, with the final amount raised in this round still subject to change, as negotiations are still in early stages. The funds are expected to help alleviate the financial strain on Musk’s rebranded platform X, especially in light of the heavy debt load tied to the Twitter acquisition. Bloomberg previously reported that X had paid approximately $200 million in interest payments related to the acquisition in March alone, with annual servicing costs projected to exceed $1.3 billion by the end of 2024.
xAI Holdings emerged in March from the merger of Musk’s AI firm, xAI, with Twitter (now X). Since the merger, Musk’s team has been quietly reaching out to potential investors to gauge interest in funding the venture. The aim is to raise significant capital over the next few months to support both the AI and social media aspects of xAI.
The scale of this funding round highlights the growing investor interest in AI ventures, which are seen as highly promising in the evolving tech landscape. Additionally, Musk’s prominence as an entrepreneur and political figure—his close ties to former US President Donald Trump, in particular—have likely contributed to the strong interest in supporting xAI Holdings. While Musk is expected to step back from direct political engagement soon, his influence remains a factor in shaping investor confidence and policy discussions.
This funding effort underscores Musk's strategic push to diversify his business empire, combining social media with cutting-edge AI technology, and could have significant implications for both sectors moving forward.
