In what could be a tangentially beneficial move for X, xAI is reportedly in advanced talks on a new funding round, which would seek an additional $15 billion in equity, at a valuation of $230 billion for the xAI project.

Which is a big jump from the $113 billion valuation that X shared back in March, when xAI acquired X the app. That acquisition immediately reduced the pressure on X’s flailing ad business, because xAI’s funding could now be used to also support X, as a key data provider, within the scope of the xAI project.

But at the same time, xAI is costing a heap of money, with reports suggesting that Elon’s AI project is burning through $1 billion or more each month, as it builds out its data center infrastructure to support its ambitions.  

That would mean that xAI has a more limited runway than many expect. And with few income streams for the project as yet, it could still fall apart, even if X does gain this new cash injection.

According to Bloomberg’s reporting back in June, xAI is on track to generate around $500 million in revenue in 2025, which will rise to $2 billion in 2026, through expanded AI access and partnerships.

Though what exactly those partnerships and deals are, we don’t know as yet. What we do know is that xAI is making some money through Grok subscriptions (ranging from $30 to $300 per month), while it’s also signed some deals with government departments and other groups to support evolving AI infrastructure needs.

Originally, it had seemed that xAI’s most likely pathway to profit would be through government deals, with Elon using the knowledge he gleaned about government systems via his DOGE project to then build AI solutions that could be embedded into these processes.

But then Elon had a public falling out with President Trump, and it seemed like maybe he’d lost that opportunity, though xAI has still signed government contracts since then, while Musk and Trump appear to have made up after their spat.

So maybe, that’s where the money will come from, yet even so, $230 billion, for a company looking to bring in $500 million this year, is a crazy multiple.

Yet, it’s also Elon Musk, and a lot of people are seemingly willing to invest in the myth of Musk as much as the production, based on his long history of promises unfulfilled, which have seemingly had little impact on his standing.

At the same time, xAI has also confirmed that it’s building new data centers in Saudi Arabia, as a result of Musk’s recent meeting with Saudi officials in Washington.

As per xAI:

“Today, xAI is proud to announce a landmark framework agreement with Kingdom of Saudi Arabia and HUMAIN, a PIF company focused on full-stack AI solutions. Together, we will design, build, and operate a new generation of low-cost, hyperscale GPU data centers in the Kingdom of Saudi Arabia.”

xAI will also be deplying its Grok AI chatbot to Saudi Arabian users, while Grok will also integrate into HUMAIN’s agent platform, HUMAIN ONE, “bringing real-time intelligence, autonomous workflows, and advanced AI copilots to government, enterprises, and society at large.”

So Musk is expanding his ties to Saudi billionaires, who are also investors in X (and potentially the reason why U.S. regulators won’t approve X’s money transmitter license).

Musk has also raised the possibility of his main money-making company, Tesla, investing in xAI, as part of a broader vision to bring AI to all elements of his projects.

So there are funding avenues available to the project, though even then, without a viable, tangible pathway to monetization, I doubt that xAI could justifiably be worth so much.

But Musk is super keen on AI, labelling it a key technology for the evolution, and salvation, of human kind.

Musk has made various wild claims on this front, including that AI and humanoid robots will “eliminate poverty.”

There’s quite a few steps to fill in there between “invent AI-powered robots” and “eliminate poverty,” but again, Musk is renowned for imagining radical, science fiction-inspired futures, which may or may not ever come to be.

I mean, right now, with the release of the latest Grok model, he seems to be more enamored with the idea of generating images of hot anime women than anything else.

Seems like quite a bridge to go from this, to bringing equity to the entire world, but that’s what Elon does, he comes up with crazy, impossible, fantastical outcomes, then asks for money to help reach them.

The question is, are these goals realistic? And if they are, how far away are they from becoming a reality?

Because in 10 years, these still seem largely impossible, but in 20 years, maybe?

Can Elon sell people on the AI future for two decades before producing real results? At what point to people start to question whether his claims are worth the money?

I don’t know, but I’m guessing that xAI will somehow find its next $15 billion, which will prop up Musk’s expanding X Corp empire.