SpaceX to Invest $2 Billion in Elon Musk's AI Startup x
- Elon Musk’s SpaceX will invest nearly half of xAI’s $5 billion funding round, marking its first public investment in the AI venture.
- The move deepens Musk’s integration of space and AI ventures as he positions xAI to compete with OpenAI.
- While SpaceX holds over $3 billion in cash, the investment adds financial pressure amid ongoing Starship development delays and test failures.
In a bold move that strengthens the link between space technology and artificial intelligence, Elon Musk's SpaceX is set to invest $2 billion in his AI venture, xAI. The investment accounts for nearly half of xAI’s $5 billion equity fundraising round, according to a report by the Wall Street Journal (WSJ).
This marks SpaceX’s first public investment into xAI and one of its largest financial commitments to an external company. Historically, SpaceX has focused its capital on aerospace innovations, with rare investments beyond the sector. The last known example was a $5.5 billion investment into a satellite initiative.
WSJ noted that this latest move comes as Musk intensifies efforts to compete with OpenAI, the company he co-founded but later distanced himself from. By aligning his rocket and AI businesses more closely, Musk appears to be building a multi-industry ecosystem spanning space, AI, transportation, and digital platforms.
Financial disclosures suggest that SpaceX currently holds over $3 billion in cash reserves, providing a cushion for this significant outlay. However, analysts warn the decision carries risks. Despite rising revenues, SpaceX is heavily investing in the Starship program its next-generation rocket that has faced repeated delays and test failures.
The WSJ also highlighted Musk's pattern of leveraging one venture to support another. In the past, he borrowed $20 million from SpaceX to sustain Tesla and used a $1 billion loan from the same company to help fund his $44 billion acquisition of Twitter (now X), which has since been repaid.
Neither SpaceX nor xAI responded to requests for comment from WSJ and Reuters regarding the investment.
As Musk moves to consolidate his empire across AI, space, and social media, industry watchers say this latest move could redefine intersector innovation though not without financial risk.
