xAI, the artificial intelligence startup founded by Elon Musk, has raised $20 billion in its latest funding round, exceeding an initial target of $15 billion as the company steps up development of its Grok artificial intelligence models.
The oversubscribed round highlights continued investor interest in generative AI, even as questions persist over the long-term returns of large-scale investments in the sector.
According to the company, the funding drew participation from a broad group of institutional investors, including Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, the Qatar Investment Authority, MGX, and Baron Capital Group.
Chipmaker Nvidia also participated in the round and will support xAI’s computing expansion by supplying advanced AI chips and related software, the company said.
Founded in 2023, xAI competes in a crowded generative AI landscape that includes OpenAI, Google, Anthropic, and Perplexity.
The funding announcement comes as Musk has faced renewed scrutiny over Grok, xAI’s flagship chatbot, which has drawn criticism from regulators and advocacy groups for allowing the creation of sexualised deepfake content through a feature referred to as “Spicy Mode.”
Despite the controversy, xAI said it made significant progress in 2025, including the deployment of what it describes as some of the world’s largest AI supercomputing systems.
The company’s Colossus I and Colossus II data centres in Memphis now house more than one million high-performance GPUs, primarily supplied by Nvidia, according to xAI. These systems are designed to support large-scale model training and inference.
xAI has also released its Grok 4 language models and introduced Grok Voice, a real-time voice assistant now available in Tesla vehicles. The company said its services reach approximately 600 million monthly active users across the X platform and Grok applications.
xAI said it is currently training Grok 5 and plans to launch additional consumer and enterprise products in the coming months.
