Elon Musk’s xAI is reportedly in early discussions to secure a new funding round that could value the artificial intelligence startup between $170 billion and $200 billion, according to the Financial Times, citing sources familiar with the talks. The deal, still in preliminary stages, is expected to see significant participation from Saudi Arabia’s Public Investment Fund (PIF), which holds an indirect stake in xAI through its $800 million investment in Kingdom Holdings Company.

Despite the report, Musk took to X to downplay the need for immediate funds, stating, “xAI is not seeking funding right now. We have plenty of capital.” The company recently bolstered its financial position with a $5 billion debt raise and a matching $5 billion strategic equity investment, as announced by Morgan Stanley in June 2025, to fuel its expansion of AI infrastructure through data centers.

Launched in July 2023 as a rival to OpenAI’s ChatGPT, xAI has rapidly scaled its ambitions. In March 2025, it acquired Musk’s social media platform X (formerly Twitter), valuing xAI at $80 billion and X at $33 billion. The company projects $1 billion in gross revenue by the end of 2025 and anticipates reaching $13 billion in annual earnings by 2029, per Morgan Stanley’s projections reported by Bloomberg. To support its growth, xAI plans to invest $18 billion in data centers, positioning itself to compete in the intensifying AI race.

The potential funding round comes as competitors like OpenAI pursue massive valuations—OpenAI aimed for up to $40 billion at a $300 billion valuation in March 2025. While details of xAI’s talks remain fluid, the reported involvement of PIF underscores the global interest in Musk’s vision to advance AI innovation, solidifying xAI’s role as a major player in the industry.