xAI Closes $3B Round Ahead of SpaceX Merger
Elon Musk's artificial intelligence firm, xAI, has closed a $3 billion funding round led by HUMAIN, a firm backed by Saudi Arabia's Public Investment Fund. This marks the final capital injection before xAI's planned merger with SpaceX. The combination is being positioned as a $1.25 trillion entity merging advanced AI with space infrastructure for commercial and defense applications.
- The investment from HUMAIN builds upon a previous agreement with xAI to jointly develop over 500 megawatts of AI data center infrastructure in Saudi Arabia and deploy xAI's Grok models in the kingdom. - HUMAIN was launched in May 2025 by Saudi Arabia's Public Investment Fund (PIF) as a strategic initiative to build a full-stack AI ecosystem and establish the Kingdom as a global AI hub, aligning with its Vision 2030 plan to diversify the economy away from oil. - Prior to the SpaceX merger, xAI had already consolidated some of Elon Musk's other ventures, acquiring social media platform X (formerly Twitter) in March 2025 in a deal that valued xAI at $80 billion and X at $33 billion. - xAI's flagship AI chatbot, Grok, is integrated with X, giving it real-time access to the platform's data for training and generating responses, a key differentiator from competitors that rely on more static datasets. - The company's stated mission since its founding in March 2023 is to build a "maximum truth-seeking" Artificial General Intelligence (AGI) in order to "understand the true nature of the universe." - Beyond data from X, Musk intends to leverage real-world data from Tesla's fleet of vehicles to help xAI's models "understand the physical world, not just the internet." - This merger follows a series of significant funding rounds for xAI, including a $6 billion Series B round in May 2024 and a reported $20 billion round in January 2026 from investors like Andreessen Horowitz, Sequoia Capital, and Fidelity. - The all-stock acquisition by SpaceX valued xAI at $250 billion and SpaceX at $1 trillion; following the transaction, HUMAIN's stake was converted into shares of the newly merged entity.
