The Article Tells The Story of:
- Elon Musk’s xAI launches a $300 million share sale
Musk’s AI company plans to let staff cash out shares while attracting new investors. - xAI aims for a $113 billion valuation after merging with X
The company’s valuation comes from a March deal that combined xAI and the former Twitter. - Musk leaves political role, shifts full focus back to business
His public exit from Trump’s Doge team follows policy disagreements. - xAI targets $5 billion in new funding through loans and bonds
Morgan Stanley is leading the financing, which adds to earlier $5 billion raised.
Musk Pushes $300 Million xAI Share Sale to Hit $113 Billion Valuation
Elon Musk’s artificial intelligence company, xAI, is selling $300 million worth of shares. This move values the company at $113 billion. The share sale lets employees sell their shares to new investors. The plan follows Musk’s March takeover of social media platform X.
People close to the matter say the secondary offering is just the beginning. A larger round of new equity sales is expected next. xAI is positioning itself to raise more money from outside investors. The $113 billion valuation reflects a combined value for xAI and X. Based on the March transaction, xAI is valued at $80 billion and X at $33 billion.
Musk bought X, formerly known as Twitter, for $44 billion in October 2022.
xAI did not comment on the new share sale.
Read More About Our Article of xAI’s Grok 3 Delay Highlights AI Model Challenges Published on
January 3, 2025 SquaredTech
Musk Refocuses on xAI, Tesla, and X After Political Fallout
The share sale comes shortly after Musk stepped away from a political role. He had been leading the Department of Government Efficiency, also known as Doge. This role involved cost-cutting work for the Trump administration. Musk clashed with several cabinet officials and criticized some of Trump’s policy plans. That led to his exit from the initiative.
Musk said he would now spend all his time working on his companies. He wrote on X that he was “back to spending 24/7 at work” and sleeping at offices and factories. He named xAI, X, and Tesla as his main focus.
He explained that the companies can benefit by working together. AI models can use data from X and reach its users. Musk said this combination of computing, models, data, and talent would boost all the companies. He did not share more details on how the March deal was structured.
xAI’s link with X gives it access to a large data stream. That data helps train AI models. X also gives xAI direct distribution to a large online audience. The deal helps X recover from advertiser loss due to Musk’s content moderation approach.
xAI Seeks More Funding Through Loans and Strategic Partnerships
In late 2023, xAI raised $5 billion from private investors. That round valued the company at $45 billion. Musk gave 25% of xAI shares to investors who had helped him buy Twitter. This group includes venture capital firms such as Andreessen Horowitz and Sequoia Capital.
Only a few close Musk allies helped structure the tie-up between xAI and X. Several major investors were not fully informed before the deal happened.
Now, xAI plans to borrow $5 billion more. The funding package includes loans and high-yield bonds. Morgan Stanley is leading the effort. People familiar with the plan say the new funding will support growth and development. Morgan Stanley has not publicly commented on the deal.
Musk launched xAI in 2023 to compete with OpenAI, led by Sam Altman, and other large tech players. xAI quickly introduced the Grok chatbot. It also built Colossus, a massive supercomputer cluster. Colossus is one of the largest AI data center projects in the U.S.
xAI’s products aim to challenge AI leaders like OpenAI, Google DeepMind, and Anthropic.
Despite Grok’s sometimes erratic behavior, xAI has landed key partnerships. In May, Microsoft agreed to offer xAI’s models to its cloud clients. Telegram also joined forces with xAI to bring Grok to its one billion users.
Musk’s shift back to business has affected other parts of his empire. Neuralink, Musk’s brain implant company, just closed a $600 million funding round. That deal valued Neuralink at $9 billion, not including the new investment. The company had previously been valued at $3.5 billion in 2023.
Conclusion: xAI Becomes Musk’s New Centerpiece
Elon Musk is turning xAI into a major part of his business plan. The $300 million share sale proves investors are ready to bet on the company’s future. The $113 billion valuation signals strong confidence in the AI sector. With Grok, Colossus, and new partnerships, xAI is gaining traction.
Musk is no longer dividing time with political projects. He is focusing on xAI, Tesla, and X. As more investors buy in, xAI could soon become one of the top names in AI. The tie to X gives xAI both data and distribution. The combination could help Musk challenge OpenAI’s lead.
The next few months will show how far xAI can grow with new funding and a tighter grip on Musk’s attention.
Stay Updated: Money Talks
