Elon Musk's SpaceX reportedly investing $2 billion in xAI; Tesla may follow suit

The world's richest man, Elon Musk, regularly moves technologies and expertise across his companies. The multi-CEO is now reportedly doing the same with funds as SpaceX finalizes its largest external financial move ever in AI startup xAI.

The space exploration firm has acquired a $2 billion stake in xAI, as first reported by The Wall Street Journal. The investment is about 40 percent of the $5 billion raised on behalf of the AI firm by Morgan Stanley a few weeks ago.

The new funding comes after xAI merged with X, raising the value of the new entity to $113 billion. More fundraising rounds are expected before the year runs out.

Musk has been embedding xAI's product in his other businesses. Grok is now incorporated in X and can respond to queries in real-time. The AI also runs SpaceX's customer support for its Starlink satellite internet business. Tesla vehicles are in the process of receiving Grok (beta) as part of the latest software update. Musk has also revealed that the Optimus robot will use Grok.

Past investments by SpaceX include $524 spent on acquiring Swarm Technologies in 2021. Years before that, Musk took $20 million from the former to help Tesla navigate its early days.

xAI recently released Grok 4, and the latest iteration of the AI has been praised as the smartest in the world

Musk also revealed Tesla could put some of its spare change in xAI in a post on X. However, he clarified that any future capital injection by the EV maker would be subject to approval by the board and shareholders.