xAI Seeks New Funding, Targets $200B Valuation

xAI is reportedly seeking new capital targeting a valuation of up to $200 billion. Saudi Arabia’s PIF sovereign wealth fund expects to play a significant role in the round.

Earlier this month, xAI secured $5 billion in funding alongside $5 billion in debt. Subsequently, the company closed a $6 billion investment round last November. That round valued xAI at $50 billion.

Expanding AI Infrastructure and Product Offerings

xAI recently introduced Grok 4, its new flagship large language model. This algorithm achieved record-setting performance across several difficult artificial intelligence benchmarks. Consequently, xAI engineers enhanced their compute infrastructure, increasing training workflow efficiency by a factor of six.

xAI plans to invest $18 billion into expanding its compute infrastructure. The company trains models using Colossus, a supercomputer located in Memphis. Specifically, xAI aims to increase its graphics cards from 200,000 to 1 million. The company projects $500 million in revenue this year. Moreover, annual sales could jump to $19 billion by 2029.

xAI sells access to its Grok LLM series via an API and consumer subscriptions. The company also develops new products, including models optimized for video generation and coding tasks. This positions xAI to compete with rivals like OpenAI. Furthermore, programming assistant developer Windsurf recently saw its co-founders and engineers join Google.