Billionaire Elon Musk’s AI startup, xAI, is reportedly preparing to launch a $300 million secondary share sale that values the company at $113 billion.
The tender offer will allow xAI employees to sell shares to new investors. This move is expected to precede a larger funding round where xAI will issue new equity to outside backers, aiming to raise additional capital.
Acquisition of X and Broader Strategic Shift
This share sale follows xAI’s acquisition of Musk’s social media platform, X, for $33 billion. The Financial Times notes that the fundraising effort comes as Musk seeks to pivot focus away from politics toward his business ventures, which have faced challenges amid his time in Washington.
Tesla shares hit a six-month low in early March, reflecting market concerns. Meanwhile, X has suffered from multiple lengthy outages. xAI itself has struggled to meet its self-imposed deadlines for upgrading its flagship AI model, Grok.
Author’s Opinion
While raising funds is a common step for startups scaling rapidly, xAI’s $300 million share sale highlights the pressure to maintain momentum amid operational setbacks. Musk’s companies face the dual challenge of managing public expectations while delivering on ambitious technological promises. This capital injection could provide much-needed runway but also raises questions about the startup’s readiness and strategic clarity moving forward.
