Photo: Samuel Corum/Getty Images xAI is in talks to raise "several billion dollars" at around a $40 billion valuation, just five months after it raised $6 billion at a $24 billion valuation, per The Wall Street Journal .
Why it matters: This illustrates how frontier model developers are the most capital-intensive startups ever, leaving early-aughts cleantechs in their digital dust. It also comes as Google reported blowout earnings, which means it may not be the AI pushover that many in Silicon Valley had come to believe.
The big variable: Musk has been promised a "cost-cutting" role in a prospective Trump administration, kind of akin to what Charles Grodin did in the movie "Dave." This all might be a campaign lark, particularly given Musk’s fuzziness on the math , but at some point the multi-company CEO will be stretched too thin. And that could create added risk for xAI investors, particularly at a $40 billion mark.
The bottom line: These deals are structured like venture capital, have missions similar to project finance, and are valued like large-cap private equity. Photo illustration: Sarah Grillo/Axios. Photo: Britta Pedersen-Pool/Getty Images
Elon Musk’s AI startup reportedly in talks for $40 billion valuation
