Elon Musk’s artificial intelligence company xAI is launching a $300 million share sale, a dramatic scale-back from the $20 billion fundraising round the company reportedly sought in April.
The secondary offering allows employees to sell existing shares to new investors at a $113 billion company valuation, according to people familiar with the matter. The deal does not raise new capital for operations.
In April, reports indicated xAI was seeking to raise $20 billion at a valuation exceeding $120 billion, which would have been one of the largest startup funding rounds ever. The current offering represents a 98% reduction from those ambitions.
The company completed a $6 billion funding round in December at a $51 billion valuation, with investors including BlackRock, Sequoia Capital and Andreessen Horowitz.
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xAI acquired Musk’s social media platform X in March for $33 billion, creating the combined $113 billion valuation. Musk bought X, formerly Twitter, for $44 billion in 2022.
Founded in 2023, xAI competes with OpenAI and other artificial intelligence companies with its Grok chatbot. OpenAI recently raised $40 billion at a $300 billion valuation.
The fundraising activity comes as Musk refocuses on his business empire after stepping down from his role leading the Trump administration’s Department of Government Efficiency on May 28. Musk thanked President Trump for “the opportunity to reduce wasteful spending” as his 130-day mandate as a special government employee ended.
Separately, Musk’s brain computer interface startup Neuralink closed a $650 million funding round Monday, with investors including ARK Invest, Founders Fund, Sequoia Capital, and Thrive Capital. The round values Neuralink at $9 billion pre-money.
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