XAI Holdings, owned by technology billionaire Elon Musk, is in talks with investors to raise approximately $20 billion to inject momentum into its newly integrated artificial intelligence and social media business. If the transaction is successfully completed, this would be the second-largest fundraising case in history, only eclipsed by the $40 billion deal closed by OpenAI earlier this year.
According to sources familiar with the matter who spoke to Bloomberg, this deal would value XAI Holdings at over $120 billion. As negotiations are still in the early stages, the final amount of fundraising may exceed current expectations. Due to the information not being public yet, the sources have requested anonymity.
XAI Holdings was announced in March 2025, formed from the merger of the social media platform formerly known as Twitter, called X, and Musk’s AI startup company, xAI.
During the merger, Musk emphasized that this integration would unleash immense potential by combining xAI’s advanced artificial intelligence technology with X’s extensive reach.
He stated at the time, “xAI and X’s futures are inseparable. Today, we are taking the step of integrating data, models, computing power, distribution channels, and talent.”
On X, Musk wrote, “The merged company will provide a smarter, more meaningful experience for billions of people, while adhering to our core mission of seeking truth and advancing knowledge. This will enable us to build a platform that not only reflects the world but also actively promotes human progress.”
CNBC reported that earlier this month, during a conference call with existing investors of XAI, Musk mentioned his desire to “assign the correct value” to XAI. Although he did not explicitly mention the upcoming new round of fundraising at the time, participants generally believe that XAI is preparing for a large-scale capital increase.
Bloomberg noted that some of the funds raised in the new fundraising round may be used to repay the debt Musk undertook when privatizing Twitter originally. This debt has been a source of financial pressure for XAI. In March of this year, XAI paid approximately $200 million in interest expenses. By the end of 2024, the annual interest expenses exceeded $1.3 billion.
At present, XAI has not made any public responses regarding this news.
This major fundraising negotiation highlights two trends: on the one hand, investors’ enthusiasm for the field of artificial intelligence continues to soar; on the other hand, it also shows that Musk remains an important figure spanning the technology and political sectors.
Despite Tesla’s recent decline in market value, down nearly 25% from the beginning of the year, some of Musk’s private enterprises, such as SpaceX, continue to achieve record high valuations. Last year, SpaceX reached a valuation of $350 billion in a private transaction, becoming the most valuable startup in history.