Elon Musk's xAI Targets $113 Billion Valuation With $300 Million Share Sale: Report

Elon Musk‘s artificial intelligence startup xAI is pursuing a $300 million share sale that would value the combined entity at $113 billion. The secondary offering allows existing staff to sell shares to new investors while validating the price tag established during xAI’s March acquisition of social media platform X.

What Happened: The tender offer represents the latest capital-raising effort for the AI company as competition intensifies in the generative artificial intelligence sector. The secondary sale will likely precede a larger primary funding round where xAI would issue new equity to external investors, the Financial Times reported, citing sources.

The March transaction structured xAI’s valuation at $80 billion while pricing X at $33 billion, creating the $113 billion combined enterprise value. Musk originally acquired Twitter for $44 billion in October 2022 before rebranding it as X and integrating it with his AI operations.

X Corp. did not immediately respond to Benzinga's request for comment.

Why It Matters: The share sale timing coincides with Musk’s recent withdrawal from the Department of Government Efficiency role. “Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” Musk posted on X, signaling renewed focus on his core business holdings, including Tesla Inc. TSLA and SpaceX.

The combined entity leverages synergies between xAI’s Grok chatbot technology and X’s data distribution network. Recent partnerships include Microsoft’s cloud integration and Telegram‘s agreement to distribute Grok to one billion users.

The strategy positions xAI to compete directly with OpenAI and other Big Tech AI rivals while monetizing X’s user base and data assets.

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