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Elon Musk’s AI startup xAI has raised a massive $10 billion in new funding, giving it a strong boost in its fight to compete with major players like OpenAI. The funding comes at a time when Musk is under fire from Donald Trump, adding a political edge to what’s already one of the most high-stakes battles in tech.

It’s a mix of big money, political tension, and Musk’s push to reshape the future of artificial intelligence. 

Here’s a closer look at what’s really going on.

$10 Billion Secured – Backed by Morgan Stanley

According to CNBC, xAI has raised $5 billion through secured debt and another $5 billion in strategic equity investment. The round was disclosed by Morgan Stanley, which is backing the company’s aggressive expansion plans.

The funds will go toward building out xAI’s AI infrastructure, including its Colossus supercomputer in Memphis and its Grok AI platform – Musk’s answer to OpenAI’s ChatGPT.

Morgan Stanley said in a statement, “The proceeds will support xAI’s continued development of cutting-edge AI solutions, including one of the world’s largest data center and its flagship Grok platform.”

Trump Targets Musk Over Govt Support

Just hours before the funding made headlines, Donald Trump launched a public attack on Musk, accusing him of relying on government subsidies.

In a post on Truth Social, Trump wrote: “No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this?”

The reference to DOGE likely points to a possible investigation or regulatory pressure on Musk’s companies.

Musk didn’t hold back, replying: “I am literally saying CUT IT ALL. Now.”

The timing of the comments has drawn attention, especially as Musk ramps up funding and expansion.

Grok Coming to Telegram

xAI is also widening its reach. The company recently partnered with Telegram, bringing its Grok AI assistant to the messaging platform’s users.

Combined with Musk’s ownership of X,  xAI has access to a vast amount of real-world data to train and test its models, which is a major advantage over other AI startups.

Next Round Could Push Valuation to $200 Billion

Reports suggest xAI may be planning to raise another $20 billion, which could push its valuation beyond $120 billion, possibly even up to $200 billion.

For a company that launched in March 2023, that would place xAI among the world’s most valuable AI startups – faster than most expected. Impressive right?

We’ll keep tabs on all things Musk and let you know. Right here on Coinpedia!