Elon Musk's SpaceX to invest $2 billion into his xAI startup: report

SpaceX is investing $2 billion into xAI, Elon Musk’s artificial intelligence company, as part of a $5 billion equity round, according to a report.

The investment, which was first reported by The Wall Street Journal, citing investors familiar with the matter, represents a further deepening of ties between Musk’s companies, which include SpaceX, Tesla and the social media platform X.

Musk has repeatedly mobilized his firms to boost his AI startup.

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Earlier this year, Musk merged xAI with X, which helped extend the reach of its Grok chatbot. The merger valued the new company at $113 billion, with the Grok chatbot now powering Starlink support and being eyed for future integration into Tesla’s Optimus robots, according to the report.

The commitment from SpaceX comes as Musk’s AI startup seeks to compete with rival OpenAI. The startup also continues to spend heavily on model training and infrastructure.

On Sunday, Musk addressed a post on X about whether Tesla could also invest in xAI.

“It would be great, but subject to board and shareholder approval,” Musk said.

Musk has called the Grok chatbot “the smartest AI in the world,” although it has recently been the subject of controversy after using antisemitic language in its responses, which xAI apologized for, blaming the cause on an update to the chatbot.

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“First off, we deeply apologize for the horrific behavior that many experienced,” the company said. “Our intent for@grok is to provide helpful and truthful responses to users. After careful investigation, we discovered the root cause was an update to a code path upstream of the @grok bot. This is independent of the underlying language model that powers @grok.”

The Wall Street Journal and Reuters contributed to this report.