In a significant move to consolidate his technology empire, Elon Musk's SpaceX has invested $2 billion in xAI, his artificial intelligence startup. The investment, first reported by The Wall Street Journal, represents nearly half of a broader $5 billion equity funding round coordinated by Morgan Stanley.
The capital injection comes just months after xAI merged with X (formerly Twitter) in March 2025. That all-stock transaction valued xAI at $80 billion and X at $33 billion, creating a combined entity worth $113 billion. The merger gave xAI access to X's massive user base and real-time data stream, valuable assets for training and improving its AI models.
Musk has been systematically aligning xAI with his other ventures since its founding in 2023. The company's flagship product, the Grok chatbot, has expanded beyond X to power customer support for SpaceX's Starlink satellite internet service. Tesla has also begun integrating Grok into its vehicles, with Musk announcing plans to incorporate the AI into Tesla's Optimus humanoid robots.
This strategic alignment—connecting AI, space technology, electric vehicles, robotics, and social media—creates an integrated ecosystem unique in the tech industry. The $2 billion investment positions SpaceX not just as a space exploration company but as a strategic player in artificial intelligence, underscoring Musk's vision of building a vertically integrated technology stack.
The investment comes as xAI intensifies its competition with rivals like OpenAI and Anthropic. Earlier this month, xAI released Grok 4, which Musk called "the world's smartest artificial intelligence." The model received strong benchmarking scores from AI assessment firms, though it has faced controversy, including an incident involving antisemitic content that prompted an apology from xAI.
When asked whether Tesla might also invest in xAI, Musk responded that such a move would be "great, but subject to board and shareholder approval." With SpaceX's $2 billion commitment, xAI now stands on firmer financial ground as it continues to develop advanced AI systems and expand its infrastructure.