Elon Musk’s aerospace firm, SpaceX, has committed $2 billion to his artificial intelligence startup, xAI, contributing nearly half of a $5 billion equity financing round, according to multiple reports. This high-stakes infusion underscores Musk’s intent to weave his AI and space ventures closer together and accelerates xAI’s push to rival competitors like OpenAI.
The funding comes shortly after xAI’s merger with X Corp (formerly Twitter), which valued the combined entity at approximately $113 billion. That merger elevated the Grok chatbot, xAI’s marquee product, into the broader Musk ecosystem—already powering services such as Starlink support and poised for integration into Tesla’s Optimus robotics initiative.
Despite this bold step, Musk firmly ruled out a full merger between Tesla and xAI, stating unequivocally “No” in response to investor speculation. He did confirm his intention to put to vote whether Tesla should make an investment alongside SpaceX—a decision subject to shareholder and board approval.
Market analysts note that the inter-company capital flow highlights Musk’s often unconventional strategy of cross-support across his ventures. While xAI reportedly burns through approximately $1 billion per month in model training and infrastructure development, it is actively pursuing further funding rounds—including a potential valuation surge between $120 billion to $200 billion in upcoming days.
Beyond finances, the xAI–SpaceX alliance is already manifesting in practical use cases for Grok, such as powering Starlink customer support. Elon Musk has previously alluded to broader deployments involving Tesla’s humanoid robot, Optimus, and internal infrastructure usage, highlighting how cross-venture integrations are part of the long-term roadmap.
Investors, while buoyed by the ambition and scale of Musk’s vision, continue to scrutinize governance complexities arising from intertwined funding between his companies. Tesla stock responded positively, reflecting persistent investor loyalty despite macroeconomic headwinds and Musk’s controversial public profile .
Looking ahead, xAI’s financial trajectory will depend on its ability to translate capital into scale—be it in global data center expansion, model training efficiencies, or product adoption. For SpaceX, the $2 billion allocation not only reinforces executive confidence in AI’s strategic importance but also offers a rare example of leveraging in-house capital to compound innovation across a billionaire’s technology empire.
