Why SpaceX is investing $2B in Elon Musk's xAI
What's the story
SpaceX has invested a whopping $2 billion in Elon Musk's artificial intelligence (AI) start-up, xAI. The investment is part of a larger $5 billion equity round and comes after xAI's merger with X. The deal values the combined company at an impressive $113 billion. The move strengthens Musk's position in the AI space as his start-up gears up to take on competitors like OpenAI.
Reason
Why the investment was done?
The investment from SpaceX comes as xAI's Grok chatbot has started powering Starlink support. There are also plans to integrate it into Tesla's Optimus robots in the future. Despite some controversies surrounding Grok's responses, Musk continues to champion it as "the smartest AI in the world." This endorsement is pushing xAI to invest heavily in model training and infrastructure development.
Past
History of fundings
Musk has used SpaceX in the past to fund his other projects. To recall, he borrowed $20 million from his rocket firm to fund carmaker Tesla in its early days, and also establish The Boring Company. More recently, he also took another $1 billion loan (and paid off) from SpaceX, to fund his purchase of Twitter (now called X).