Elon Musk’s xAI said it raised $20 billion in a funding round, exceeding its prior target of $15 billion.

CNBC reported in November that a financing would value the artificial intelligence startup at about $230 billion. After an initial report that xAI was raising $15 billion, Musk called the story “False” in a post on X.

Investors included Nvidia and Cisco Investments as well as long-time Musk company backers Valor Equity Partners, Stepstone Group, Fidelity, Qatar Investment Authority, Abu Dhabi’s MGX and Baron Capital Group.

Both Nvidia and Cisco work with xAI as vendors and strategic partners.

AI startups reached sky-high valuations in 2025, raising massive amounts of capital to power seemingly endless demand for their foundational models. In October, OpenAI closed a $6.6 billion share sale at a $500 billion valuation, and a month later Anthropic was valued at around $350 billion, with capital coming from Microsoft and Nvidia.

Musk’s AI venture now owns and operates his social network X after merging with the company, formerly known as Twitter, in March.

The company faces a new flurry of regulatory probes by authorities in Europe, India and Malaysia after its Grok chatbot generated sexualized images of children and non-consensual intimate images of adults, mostly women. Users shared the images widely on X.

Musk is centering xAI’s infrastructure buildout in Memphis, Tennessee. The data centers, which use natural gas-burning turbines as a power source, have drawn consternation from many nearby residents, as emissions have contributed to air quality problems in the area, according to local researchers.

WATCH: xAI raises $20 billion