Elon Musk’s AI company xAI said it raised $20 billion in new funding, surpassing an earlier $15 billion target. The company confirmed the round on January 6, 2026.
CNBC previously reported that the financing would value xAI at about $230 billion.
Investors in the round include Nvidia, Cisco Investments, Valor Equity Partners, StepStone Group, Fidelity, Qatar Investment Authority, Abu Dhabi’s MGX and Baron Capital Group.
Nvidia and Cisco also work with xAI as vendors and strategic partners.
The funding comes amid continued investor demand for large AI model developers. In late 2025, OpenAI completed a share sale at a reported $500 billion valuation, and Anthropic reached about $350 billion with backing from Microsoft and Nvidia.
xAI now owns the social platform X after a merger completed in March 2025.
The company is expanding its major data center capacity in Memphis, Tennessee, a project that has drawn attention from local communities and regulators due to its scale and energy consumption.
Why This Matters Today
The raise underscores the volume of capital flowing into foundation model developers as companies race to secure computing resources and talent. At an implied valuation of roughly $230 billion, xAI sits among the highest-valued private AI firms globally.
xAI is also operating under heightened scrutiny.
Regulators in multiple regions have launched investigations into the company following issues related to its Grok chatbot.
At the same time, xAI has secured government and commercial contracts, including work with the U.S. Department of Defense and integrations on prediction platforms.
Our Key Takeaways:
- xAI said it raised $20 billion in a new funding round, with prior reporting indicating a valuation of about $230 billion.
- Investors include Nvidia, Cisco Investments, and several major institutional backers already involved in other Musk-led companies.
- The raise highlights strong investor interest in foundation AI developers even as xAI faces regulatory scrutiny and continues large-scale infrastructure expansion.
You may also want to check out some of our other tech news updates.
Wanna know what’s trending online every day? Subscribe to Vavoza Insider to access the latest business and marketing insights, news, and trends daily with unmatched speed and conciseness. 🗞️
