
Elon Musk's SpaceX Commits $2 Billion To xAI In $5 Billion Round As AI Startup Hits $113 Billion Valuation Amid Controversy
- by Benzinga
- Jul 16, 2025
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"We are aware of recent posts made by Grok and are actively working to remove the inappropriate posts," Grok said. The post also said that xAI had taken action to ban hate speech before Grok posts on the platform.
The company attributed earlier controversial responses to an unauthorized change in Grok's software and has since initiated further refinements. Musk also posted, "We have improved Grok significantly," indicating ongoing technical adjustments.
Strategic Investment Aligns With Musk's Track Record of Cross-Venture Support
The investment marks the first known capital injection from SpaceX into xAI and is also one of the largest investments SpaceX has made into another company, according to the Journal. Musk has a long history of leveraging his various businesses to support one another, including using SpaceX equipment for The Boring Co. and borrowing funds from SpaceX during Tesla's early days.
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Musk's representatives have reportedly told investors that additional business partnerships between SpaceX and xAI are likely in the future, the Journal says. This signals a growing integration across Musk's portfolio, connecting AI development, space infrastructure, and consumer-facing technologies.
At xAI, Musk is investing billions each year into training new AI models, mirroring the high-spending strategies seen at other well-funded AI startups. According to the Journal, these costs are being matched by rising valuations and increasing pressure to deliver competitive performance across multiple sectors.
While xAI's ambitions remain large, including deeper integration with Tesla and other Musk-led ventures, the backlash underscores the challenges of scaling AI models that interact directly with the public. With the $2 billion investment, xAI's future developments may draw even more attention from stakeholders across the industry.
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