Elon Musk's surprise tweet about xAl funding has shocked everyone

Elon Musk’s ventures are no stranger to controversy, but his latest comment on xAI, his artificial intelligence (AI) startup, sent shockwaves through tech and financial circles.

What was expected to be another mega-funding story ended with Musk bluntly calling it “fake news.”

Musk denies $10 billion funding report

On September 19, several media outlets reported that xAI was raising $10 billion at a staggering $200 billion valuation.

Just hours later, Musk jumped on X (formerly Twitter), the social platform he owns, to deny the claims.

“Fake news, xAI is not raising any capital right now,” he wrote, leaving investors puzzled.

This denial contrasted sharply with the fundraising patterns of AI rivals, such as Perplexity AI, which has raised over $1 billion in the past year alone and is now valued at $20 billion.

It should be noted that Musk has long emphasised the deep ties between xAI and X. 

When xAI acquired X on March 30 in an all-stock transaction, the deal valued xAI at $80 billion and X at $33 billion.

Musk said the merger would blend xAI’s advanced AI capabilities with X’s massive reach, a combination he claimed would “unlock immense potential.”

Previous funding rounds and spending

Despite Musk’s denial of a new raise, reports in June indicated that xAI launched a $5 billion debt sale and a $300 million share sale, which valued the startup at $113 billion.

At the same time, projections showed xAI expected to spend $13 billion in 2024 while earning only $500 million, underscoring the industry’s costly race for AI dominance.

While Tesla shareholders recently reviewed a compensation package that could be worth nearly $1 trillion, Musk has resisted calls to fold xAI into Tesla, insisting the ventures remain independent.