Elon Musk calls xAI $15 billion fundraise report false and misleading

The big AI money mystery

Ever hear a juicy rumor that turned out to be completely wrong? That’s exactly what happened with a recent billion-dollar report about Elon Musk’s AI company, xAI. A major news network claimed his startup raised a staggering $15 billion from eager investors.

Musk quickly stepped onto his own platform, X, to denounce the story as false. This clash highlights the intense speculation and secrecy surrounding the world of artificial intelligence funding.

Musk rejects the fake news

Elon Musk publicly called a CNBC report false on his social media platform, X. The news outlet had claimed his artificial intelligence firm, xAI, successfully raised $15 billion from investors. This isn’t the first time Musk has disputed such reports about his company’s funding.

The conflicting information creates a classic “he said, they said” scenario that leaves everyone wondering about the truth. This kind of confusion is becoming more common in the rapidly evolving and highly competitive world of tech startups, where perception can be as important as reality.

The original $15 billion claim

CNBC reported that the latest round added roughly 5 billion dollars to an earlier report of 10 billion dollars, valuing xAI at around 200 billion dollars. Still, the company has not confirmed those figures, and Musk publicly disputed the report.

The report suggested most of this money was destined for buying powerful computer chips called GPUs. These specialized components are the essential building blocks for training advanced AI systems like xAI’s own Grok.

A staggering valuation figure

If the initial reports were accurate, xAI would be valued at an astonishing $200 billion. That number is almost hard to comprehend, especially for a startup founded in 2023. It would instantly place Musk’s AI venture among the most valuable private companies in the entire world.

This potential valuation shows how frothy the market for artificial intelligence has recently become. Investors are seemingly willing to bet billions on companies they believe will dominate the next technological revolution, making it a high-stakes race for a piece of the future.

The AI gold rush

xAI isn’t the only AI company attracting colossal sums of money. Other startups like Anthropic and OpenAI have also secured massive funding rounds, reaching into the tens of billions. These eye-popping numbers are becoming the new normal in the red-hot AI sector.

The industry is experiencing a monumental investment frenzy, with capital flowing in at an unprecedented rate. This is all driven by the belief that AI will fundamentally transform entire global industries, and everyone is scrambling to back the next big winner.

Costly computer brains

At the heart of this race are Graphics Processing Units, or GPUs. Think of them as the super-powered engines that make complex AI possible. They perform the trillions of calculations needed to train systems like xAI’s Grok chatbot.

Companies are spending billions to secure these chips, as they are the fundamental key to progress. Without enough GPUs, developing smarter and more capable AI models becomes practically impossible, turning the components into a critical and sometimes scarce resource.

Building the Colossus

Reporting suggests Colossus already runs on the order of a few hundred thousand GPUs and that xAI and local partners have discussed plans to scale capacity toward as many as one million GPUs, though exact deployed numbers vary by source.

The scale and speed of this construction are remarkable, showing how competitive the AI landscape truly is. Being just a step behind in infrastructure could mean losing the entire race, prompting a frantic build-out of computing power.

Powering the AI machines

This rapid build-out comes with a significant appetite for electricity. Local reporting and regulatory filings indicate the Memphis site uses large on-site power generation, including natural gas turbines, and has raised questions among researchers and community groups about emissions and grid impacts.

This creates a complex dilemma between the breakneck pace of technological advancement and its potential environmental footprint. As AI grows, its enormous energy demands are drawing increased scrutiny from communities and environmental advocates alike.

Meet Grok, the chatbot

xAI’s most famous product is a chatbot named Grok, designed to compete with ChatGPT. Musk has promoted Grok as having a more rebellious and humorous personality than its rivals. It is integrated directly into his X platform, aiming to offer a different kind of user experience.

However, Grok has not been without its share of controversy. Critics have accused it of generating and spreading misinformation and even hateful content, sparking important debates about AI ethics and developer responsibility.

A new wiki rival?

The company also recently launched Grokpedia, intended as an alternative to Wikipedia. The goal is to create an online encyclopedia that relies on AI and promotes a more neutral point of view, according to Musk. This move directly challenges established sources of collective knowledge.

It has been met with both interest and skepticism from the public. The success of such a project will depend entirely on its ability to build trust and ensure consistent accuracy in its AI-generated content.

Musk’s interconnected empire

Elon Musk has formally reorganized parts of his business empire: in March 2025, xAI announced an all-stock transaction to combine with the social media platform X, a move Musk said would link X data and xAI models.

This integration doesn’t stop there. You can now find the Grok chatbot inside newer Tesla vehicles, while xAI buys massive battery storage systems from Tesla for its data centers.

A historic pay package

In related news, Tesla shareholders recently re-approved a monumental pay package for Musk. Shareholders approved a record-breaking compensation plan for Musk tied to aggressive performance targets.

Media coverage described the package as worth up to about one trillion dollars under optimistic assumptions, while other reporting used a lower estimate of about 878 billion dollars, depending on accounting choices.

This vote of confidence from investors shows their belief in Musk’s long-term vision for the electric car company. The reward is entirely contingent on Tesla achieving unprecedented market success and expansion in the coming years.

Want to see how that stacks up against another tech giant? Check out how OpenAI now tops SpaceX in valuation.

Investors draw a line

A nonbinding shareholder proposal to authorize Tesla to invest in xAI drew more votes in favor than against, but a large number of abstentions meant the measure was not approved under the company filing, and Tesla said it will examine next steps.

The decision indicates a desire to keep Tesla focused on its core mission of building electric vehicles and sustainable energy products. Following the vote, a Tesla official said the company is “considering next steps on the issue,” leaving this particular idea on hold for now.

Curious what other ambitious AI projects Musk is cooking up? See how he envisions a future with an AI-built Microsoft.

Was this the right call by Tesla’s investors? Share your take in the comments, and tap the heart if you’re surprised by this decision.

Read More From This Brand:

• Amazon starts using humanoid robots for faster shipments
• Elon Musk speaks out as Grok faces a brief account suspension
• Elon Musk claims Grok’s upcoming version could achieve AGI

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This slideshow was made with AI assistance and human editing.