Musk says xAI is not raising capital after CNBC report on $10 billion funding

Elon Musk on Friday said that xAI is not raising capital right now, following a CNBC report earlier in the day on the AI firm raising $10 billion at a post-money valuation of $200 billion.

"Fake news. xAI is not raising any capital right now," Musk said on X.



According to the CNBC report, the funding was likely to go to building data centers using Nvidia and AMD graphics processing units, needed to develop next-generation AI, as well as to hire expensive talent.

The AI startup has been ramping up its data center capacity to train more advanced models, as it looks to compete more effectively with OpenAI's ChatGPT and Anthropic's Claude. Its supercomputer cluster in Memphis, Tennessee, called Colossus, is touted as the largest in the world.

Investor enthusiasm towards AI startups has remained strong despite doubts over the tech industry's spending.

If the $200 billion valuation in the CNBC report is accurate, it would imply an over twofold jump from the $75 billion in July, according to data from Pitchbook.

It would also make xAI among the most valuable companies in the world behind OpenAI, China's Bytedance and Musk's SpaceX.

OpenAI is in early-stage discussions about a stock sale that would allow employees to cash out and could value the company at about $500 billion, Reuters had reported in August, while ByteDance is set to launch a new employee share buyback that will value the Chinese technology giant at more than $330 billion.

Anthropic had said it raised $13 billion at a post-money valuation of $183 billion earlier this month.

Morgan Stanley had said in late June xAI had completed a $5 billion debt raise alongside a separate $5 billion strategic equity investment, as the startup looked to expand its AI infrastructure through data centers amid intense competition.

Musk had launched xAI in July 2023 as an alternative to OpenAI's ChatGPT.