Elon Musk’s artificial intelligence firm xAI secured $10 billion in fresh capital, doubling down on its challenge to OpenAI as the race to dominate the AI landscape intensifies. The funds were evenly split between secured debt and strategic equity investments.
The influx gives xAI more resources to expand its Memphis-based Colossus supercomputer and train its Grok chatbot, CNBC reported Tuesday, citing Morgan Stanley. The funding round was reportedly oversubscribed, with major investors vying for stakes in Musk’s AI vision.
Musk’s AI push comes as American rivals race ahead. OpenAI closed a $40 billion raise earlier this year at a staggering $300 billion valuation, while Anthropic secured fresh backing that pushed its value beyond $60 billion.
In March, Musk sold his social media platform X to xAI, integrating Grok directly into the platform. The deal valued xAI at $80 billion and X at $33 billion, deducting $12 billion of debt from the $45 billion valuation. He originally bought X, formerly Twitter, for about $44 billion in April 2022.
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Musk’s feud with Trump flares up again
The recent raise comes as Musk’s feud with US President Donald Trump has reignited.
On Tuesday, Trump lashed out at Musk on Truth Social, claiming he owes his success to government subsidies and suggesting the federal Department of Government Efficiency (DOGE) should investigate Musk’s businesses to cut costs.
“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!” Trump wrote.
Musk fired back on X, declaring, “I am literally saying CUT IT ALL. Now,” distancing himself from reliance on federal support. Their spat over government spending has rattled markets before, with Tesla losing $150 billion in value during a clash in June.
The renewed hostilities come as Musk has ramped up his political commentary, warning lawmakers who supported the recent spending bill of potential primary challenges and calling for a new party to counter what he sees as runaway government excess.
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Lummis pushes for crypto tax relief
Meanwhile, Senator Cynthia Lummis has introduced an amendment to Trump’s tax and spending bill aimed at ending what she calls “unfair tax treatment” for crypto users.
The proposal would waive taxes on digital asset transactions under $300, with a $5,000 annual cap, and delay taxes on crypto earned through mining, staking or airdrops until the assets are sold. It would also apply the 30-day wash sale rule to crypto, limiting quick tax-loss strategies.
Earlier, the Senate rejected a Democrat-sponsored amendment that sought to ban government officials and their families from owning or promoting cryptocurrencies, including memecoins and NFTs, for up to a year after leaving office.
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