The AI startup X.AI, owned by billionaire Elon Musk, is in talks to raise $4.3 billion through equity investment in addition to its plans to finance $5 billion in debt, according to information shared with investors.
Bloomberg reported that the commitments related to the sale of $5 billion in debt are due today, Tuesday. Additionally, X.AI may also receive a $650 million discount from a manufacturing company, which will help it reduce costs, according to the report.
The report added that the value of X.AI, which acquired X earlier this year, will reach $80 billion during the current year, up from $51 billion at the end of 2024.
Bloomberg reported that between its establishment in 2023 and the launch of its debt sale this year, X.AI raised $14 billion through equity fundraising.
Training and deploying advanced AI systems is extremely costly, due to expensive hardware, intensive computing, and the need for skilled employees in a highly competitive market.
The Grok chatbot company needs new funding, partly because it has already spent most of what it previously raised, according to the report.
The competing company OpenAI announced in March that it would raise up to $40 billion at a valuation of $300 billion in a new funding round led by SoftBank Group.
Musk co-founded OpenAI in 2015, but he stepped down from the company's board in 2018.
