Musk's xAI raises $20 billion in upsized Series E funding round

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Home > Finance > Musk's xAI raises $20 billion in upsized Series E funding round

Finance

Musk's xAI raises $20 billion in upsized Series E funding round

Published by Global Banking and Finance Review

Posted on January 6, 2026

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Tags:innovation venture capital Artificial Intelligence technology investment

Jan 6 (Reuters) - Elon Musk's artificial intelligence startup xAI announced Tuesday it raised $20 billion in an upsized Series E funding round, exceeding its $15 billion target as it ramps up development of new AI models and computing infrastructure.

Valor Equity Partners, StepStone Group, Fidelity Management & Research Company and Qatar Investment Authority participated in the round, xAI said.

Nvidia and Cisco Investments joined as strategic investors, and xAI said their backing would help it expand computing capacity.

When contacted by Reuters for comment by email, xAI replied with the message, 'Legacy Media Lies.'

xAI, which is training its next-generation Grok 5 model, said it will use the new money to build infrastructure, speed development and deployment of AI products, and fund research.

Investor demand for AI deals has stayed strong despite warnings of a bubble, as companies spend heavily on computing power and new models.

xAI has rapidly expanded its data-center footprint to train more advanced systems as it tries to close the gap with OpenAI's ChatGPT and Alphabet's Gemini.

(Reporting by Prakhar Srivastava in Bengaluru; Editing by Tasim Zahid)

Frequently Asked Questions about Musk's xAI raises $20 billion in upsized Series E funding round

1What is venture capital?

Venture capital is a form of private equity financing provided by investors to startups and small businesses with long-term growth potential. It typically involves high risk but can yield substantial returns if the company succeeds.

2What is artificial intelligence?

Artificial intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn. AI can perform tasks such as problem-solving, understanding natural language, and recognizing patterns.

3What is a funding round?

A funding round is a stage in the process of raising capital for a business. It typically involves investors providing funds in exchange for equity or convertible debt, helping the company grow and develop.

4What is computing infrastructure?

Computing infrastructure refers to the physical and virtual resources that support the operation of IT services and applications. This includes servers, storage, networking equipment, and software systems.

5What is investor demand?

Investor demand refers to the level of interest and willingness of investors to purchase securities or invest in specific assets. High demand can lead to increased valuations and successful fundraising efforts.