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SpaceX to invest $2 billion in Elon Musk’s xAI: report

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SpaceX is investing $2 billion into Elon Musk’s artificial intelligence startup, xAI, marking one of the private space company’s largest-ever financial commitments to another firm. 

News of the investment was initially posted by The Wall Street Journal.

Part of a broader $5 billion funding round

The $2 billion investment is reportedly part of a broader $5 billion equity raise for xAI announced by Morgan Stanley last month. As per investors reportedly familiar with the matter, this is SpaceX’s first known investment in xAI. The AI startup was recently merged with X, Musk’s social media platform, in a deal that valued the combined entity at $113 billion.

Musk has mobilized several of his companies to support xAI’s growth. In addition to Grok being embedded in X, it now powers support functions for SpaceX’s Starlink satellite internet service, the WSJ noted. Tesla has also started integrating Grok on its new vehicles. Musk has stated that Grok will be used with Tesla’s humanoid robot, Optimus, as well. 

Racing to scale, despite growing challenges

The investment highlights Musk’s ambitions to position xAI as a major competitor to rivals such as OpenAI. Grok 4, launched earlier this week, received strong benchmarking scores, with Musk calling it “the smartest AI in the world.” So far, xAI’s performance boost with Grok 4 has earned praise from AI-benchmarking firms, such as Artificial Analysis.

SpaceX, which had more than $3 billion in cash as of earlier reports, is typically very conservative with external investments. One of its few past acquisitions was a $524 million deal for a satellite-communications firm in 2021. Musk has previously used SpaceX resources to support his other ventures, including Tesla and The Boring Company. 

In a recent comment on X, Elon Musk also acknowledged that it would be great if Tesla could invest in xAI as well, though doing so would be subject to Board and shareholder approval.

The post SpaceX to invest $2 billion in Elon Musk’s xAI: report appeared first on TESLARATI.


Source: https://www.teslarati.com/spacex-to-invest-2-billion-in-elon-musks-xai-report/


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