Elon Musk’s AI startup xAI has secured $10 billion in fresh funding, deepening its rivalry with OpenAI. But the raise comes as former U.S. President Donald Trump revives his feud with Musk—this time, threatening a government crackdown under a sarcastic “DOGE” department.
🧠 What Happened
xAI, Elon Musk’s artificial intelligence venture, raised $10 billion in a mixed funding round split between secured debt and strategic equity. The capital will help build out the company’s Memphis-based Colossus supercomputer and train Grok, the AI chatbot now embedded in X (formerly Twitter).
The deal was reported by CNBC, citing Morgan Stanley sources. The round was reportedly oversubscribed, signaling strong investor interest despite Musk’s history of volatility and political friction.
In March, Musk folded X into xAI, effectively merging the two companies. The transaction pegged xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt. Musk had purchased X in 2022 for $44 billion.
xAI’s funding comes as competitors move aggressively. OpenAI raised $40 billion this year, valuing it at $300 billion, while Anthropic surpassed $60 billion in valuation with recent capital injections.
📊 Market or Technical Insight
For investors watching the AI race, Musk’s $10B move signals one thing: he’s not backing down.
The AI sector is consolidating fast. With Grok integrated into X, Musk controls both a data-rich social platform and a training environment. That could make xAI a credible challenger to OpenAI’s ChatGPT or Anthropic’s Claude.
But there’s a twist. Musk’s battle isn’t just technological—it’s also political.
⚠️ Musk vs. Trump: DOGE Threats Resurface
As xAI’s news broke, Trump took to Truth Social to attack Musk:
“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!”
Trump accused Musk of profiting off government subsidies and hinted that a fictional Department of Government Efficiency (DOGE) should investigate his companies.
Musk responded swiftly on X:
“I am literally saying CUT IT ALL. Now.”
This isn’t their first clash. In June, a similar spat wiped $150 billion off Tesla’s market cap. Markets are again on alert for political risk tied to Musk’s companies, including Tesla and SpaceX.
💬 Quotes
“No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!” — Donald Trump, via Truth Social
“I am literally saying CUT IT ALL. Now.” — Elon Musk, via X
💸 Investor Angle: Crypto Regulation Enters the Chat
While Musk and Trump spar, crypto investors are watching a different development.
Senator Cynthia Lummis proposed an amendment to Trump’s tax and spending bill that could reshape crypto taxation:
- No taxes on crypto transactions under $300 (up to $5,000/year).
- Taxes on mining, staking, airdrops would be deferred until assets are sold.
- The amendment would also bring in a 30-day wash sale rule, limiting tax-loss harvesting tactics.
This came shortly after a failed Democrat-led amendment that aimed to ban officials and their families from owning or promoting crypto, including NFTs, for 1 year after leaving office.
🔚 Conclusion
Between a $10B AI raise, a high-stakes political feud, and new crypto tax reform in the pipeline, Musk remains at the center of multiple financial flashpoints.
With Lummis’ amendment under review and xAI racing toward parity with OpenAI, investors should watch two fronts—AI scale and crypto regulation.
Will Musk’s next move shake both markets again?
