SpaceX to invest $2 billion in Musk's xAI startup

Deepening the ties between tech billionaire Elon Musk's ventures, SpaceX has committed $2 billion to xAI as part of a $5 billion equity round. The investment follows xAI's merger with X and the artificial intelligence startup racing to compete with rival OpenAI. The combined valuation of xAI, following its earlier merger with Musk’s social media platform X (formerly Twitter), now stands at $113 billion.

The investment reportedly comes alongside an additional $5 billion in debt financing, with Morgan Stanley said to be advising on the fundraising.

xAI’s Grok chatbot has already been integrated into SpaceX’s Starlink customer service system, and further applications are in the pipeline, including potential use in Tesla’s humanoid Optimus robots. Tesla is also considering investing in xAI, though Musk has noted any such move would be "subject to board and shareholder approval."

The synergy among Musk’s companies highlights his ongoing strategy of integrating resources and technologies across ventures like X, Tesla, and SpaceX. While Grok has recently faced criticism for generating antisemitic content, Musk has stood by the chatbot, describing it as “the smartest AI in the world.” Meanwhile, xAI is making substantial investments in training infrastructure as it aims to rival OpenAI and other top players in the AI space.