SpaceX has announced a significant investment of $2 billion into xAI, the artificial intelligence startup founded by Elon Musk. This move represents one of the largest financial commitments the private space exploration company has made to another firm. The news was first reported by The Wall Street Journal.
The $2 billion investment forms part of a broader equity raise for xAI, which is seeking to secure $5 billion in total, according to information disclosed by Morgan Stanley last month. This marks SpaceX’s first known financial involvement with xAI, highlighting Musk’s strategy to integrate advanced AI technology across his various ventures.
The integration of xAI has already begun, as it was recently merged with X, Musk’s social media platform. This merger valued the combined entity at $113 billion. The AI technology developed at xAI, particularly the Grok system, has been embedded into X and is now also enhancing support functions for SpaceX’s Starlink satellite internet service. Additionally, Tesla has started incorporating Grok into its latest vehicle models and plans to use it with its humanoid robot, Optimus.
Musk has ambitions for xAI to emerge as a formidable competitor against established players like OpenAI. The recently launched Grok 4 has received positive assessments from AI-benchmarking firms such as Artificial Analysis, with Musk branding it as the “world’s smartest artificial intelligence.”
SpaceX has been cautious with its external investments in the past. A prior notable acquisition was its $524 million purchase of Swarm Technologies, a satellite communications firm, in 2021. Despite having over $3 billion in cash reserves, the company typically adopts a conservative approach to such financial commitments. Musk has also indicated that he is considering having Tesla invest in xAI, although such a decision would require board and shareholder approval.
The investment in xAI reflects Musk’s vision for leveraging cutting-edge technology across his business portfolio, including SpaceX, Tesla, and The Boring Company. As he continues to push the boundaries of innovation, the financial backing of SpaceX could significantly bolster xAI’s development and its competitive stance in the rapidly evolving AI landscape.
