Elon Musk's SpaceX invests $2 billion in xAI to expand AI empire with Grok and X integration, raising valuation to $113 billion | Report

In a major strategic move, Elon Musk’s aerospace firm SpaceX has invested $2 billion in his artificial intelligence startup, xAI. The merger of xAI with social media platform X earlier this year valued the combined company at $113 billion, according to reports. From the orbital ambitions of Starlink and SpaceX to the on-the-ground deployment of Tesla’s Optimus robots and Grok’s chatbot capabilities, this $2 billion move ties AI deeper into Musk’s future vision. However, with complex logistics, multiple high-cost ventures, and public scrutiny over Grok’s reliability, Musk’s ecosystem must now prove its technological promise and commercial viability in equal measure. This marks SpaceX’s most substantial cross-industry investment to date and comes as Musk intensifies efforts to compete with OpenAI.

Elon Musk strengthens AI empire with xAI merger and Grok expansion

As reported by Reuters, the $2 billion funding follows a structural merger between xAI and X (formerly Twitter), Musk’s social media platform. This strategic move pushed the company’s valuation to $113 billion, as reported during a June 2025 equity raise led by Morgan Stanley. The updated valuation reflects investor optimism not only in the future of artificial intelligence but also in Musk’s ability to align his tech ecosystem from rockets to chatbots under a common AI-first vision. The merger also signals that Grok, xAI’s proprietary chatbot, will play a central role in the Musk-led AI infrastructure.One of the most significant developments highlighted as reported is the growing role of xAI’s Grok chatbot. Currently used to power customer support services for Starlink, Grok is also being tested for deeper integration into Musk’s other ventures most notably Tesla’s Optimus humanoid robots. According to a source quoted in the report, Musk’s long-term vision includes building a unified AI backbone that serves functions across all of his companies, with Grok at the core. This cross-platform integration highlights how xAI’s tools are central to SpaceX, Tesla, and X's future operations.

SpaceX makes rare $2 billion investment in Elon Musk’s AI startup xAI

SpaceX’s $2 billion contribution to xAI represents an unusual step for the aerospace company, which has rarely invested outside its core mission. According to the Reuters report, this is one of SpaceX’s largest investments in another firm, and follows earlier investments such as $524 million in satellite technology. Historically, Elon Musk has leveraged SpaceX to support his other ventures—borrowing $20 million to fund Tesla in its early days and even taking a $1 billion loan from SpaceX to finance his acquisition of Twitter (now X), which he later repaid. This latest funding could be seen as part of that pattern, but on a much larger scale.

SpaceX’s dual funding of Starship and xAI raises financial risk concerns

While the new funding boosts xAI’s technological ambitions, the report also highlights potential risks. SpaceX is already investing heavily in the development of its Starship rocket, a project that has suffered delays and test failures in recent months. Although the company reportedly holds over $3 billion in cash reserves, as reported, the financial burden of backing both Starship and xAI simultaneously could stretch resources and investor patience.Also Read | Shubhanshu Shukla’s journey: From secret NDA application to fighter pilot to India’s first astronaut on the ISS after 41 years