Elon Musk Denies Reports of a $15 Billion Funding Round as xAI Faces Rising Pressure to Scale

Elon Musk on Thursday forcefully denied reports that his artificial intelligence startup xAI has raised $15 billion in a new Series E funding round, dismissing CNBC’s latest claim as “false” in a statement posted to X. The denial comes at a moment of intense scrutiny around the company’s valuation, fundraising pace, and its aggressive push to compete with OpenAI and Anthropic in the high-stakes race to build the next generation of frontier AI models.

According to CNBC, the alleged round added $5 billion to an earlier-reported $10 billion raise that would have valued xAI at roughly $200 billion—placing it among the most expensive early-stage AI companies in history. Musk rejected both the previous and updated reports, stating that the channel has repeatedly overstated xAI’s capital raises. When contacted for clarification, the startup’s X account responded with what appeared to be an automated message: “Legacy Media Lies.”

The conflicting statements highlight the increasingly opaque and volatile dynamics surrounding the financing of AI model developers, where valuations can shift rapidly based on GPU capacity, model performance, and investor sentiment. While Musk disputes the reported size of the round, he has not denied that xAI is actively pursuing new capital, at a time when the company is scaling up compute resources at unprecedented speed.

xAI, launched in 2023 as Musk’s answer to OpenAI’s ChatGPT and Anthropic’s Claude, is investing heavily in data center infrastructure and silicon procurement. The company is in the process of building out its “Colossus” supercomputer in Memphis, Tennessee, which Musk has described as one of the largest AI training systems ever attempted by a private firm. Securing enough high-end graphics processing units—specifically Nvidia and cutting-edge alternatives—is now the single largest capital expense for any frontier-model company, and xAI is no exception.

CNBC reported earlier that much of the alleged capital would be used to acquire GPUs required to train xAI’s next series of large language models. While the report’s accuracy is disputed, it reflects a reality of the broader industry: training frontier AI models now requires billions of dollars in compute, and even companies with enormous resources, such as OpenAI and Anthropic, have had to rely on mega-rounds from Microsoft, Amazon and Google to fund development.

Investor interest in AI remains frenzied despite growing warnings of a possible bubble. Valuations of private AI firms have surged beyond historical benchmarks, powered by the belief that only a handful of companies will ultimately dominate the most important technological platform shift since the internet. But that momentum has also created pressure for startups like xAI to scale rapidly, secure hardware supply, and build defensible technical advantages before competitors lock down increasingly scarce chips.

Musk’s public denial may be aimed at tempering speculation about xAI’s valuation, or simply asserting control over the narrative. The company has not disclosed its current funding total, though earlier filings suggested xAI had raised at least several billion dollars from investors aligned with Musk’s various ventures. The broader Musk ecosystem—including Tesla, SpaceX and The Boring Company—has historically attracted deep-pocketed backers willing to commit large sums on ambitious timelines.

The denial also arrives at a sensitive moment for Musk’s relationship with the broader AI sector. His position as both a critic of OpenAI and a direct competitor has escalated tensions, and his public-facing companies are increasingly intertwined with xAI’s strategy. Tesla shareholders have questioned whether Tesla’s compute infrastructure, which is central to the automaker’s autonomy goals, may be influenced by xAI’s ambitions. Musk has previously argued that Tesla will benefit from xAI’s model development, but investors remain divided.

Meanwhile, xAI continues to push its technical agenda forward. The company recently released versions of its Grok model that compete directly with Claude 3.5 and GPT-4, and has highlighted the model’s ability to ingest real-time data from X—an advantage Musk says will enable more current and conversational outputs than competitors. However, scaling from early-stage models to full frontier systems requires magnitudes more computing power, talent, and capital.

Whether xAI has in fact raised the billions reported—or whether a different structure is being negotiated privately—remains unclear. Musk has not confirmed any fundraising targets, nor has he addressed whether xAI intends to pursue outside capital or continue to rely on his existing network of investors. But with competitors accelerating rapidly, GPU supply tightening, and global demand for compute rising exponentially, xAI is unlikely to avoid raising substantial amounts in the near term.

For now, Musk’s message is simple: the reported numbers are wrong, and xAI will control its own narrative. What remains unspoken is the scale of funding required for xAI to match the capabilities of its rivals—and how quickly the company must move before the AI arms race becomes even more expensive.