How xAI’s multi-billion dollar funding push could reshape the future of X (formerly Twitter)
Elon Musk is once again redefining digital platforms. His AI company, xAI, is raising as much as $12 billion in new funding to scale artificial intelligence infrastructure. The objective? A massive xAI funding expansion to power its Grok models—and reduce X’s (formerly Twitter) overwhelming reliance on advertising revenue.
Why xAI Funding Expansion Matters Now
Before Musk acquired X, the platform generated over 90% of its revenue through traditional advertising. However, since his $44 billion takeover, the company has seen a sharp decline in ad partnerships. Major brands have exited the platform, and revenues have dropped by more than 60%.
In response, Musk is shifting X’s business model from ad-supported to AI-driven. His solution centers on xAI, a venture he founded to build competitive AI systems, including the conversational bot Grok.
With the launch of Grok-4 in July 2025, X witnessed a dramatic uptick in subscription income. For example, iOS revenue surged from just $99,000 to $419,000 in 48 hours.
How the xAI Funding Expansion Will Work
According to reports, xAI is actively securing up to $12 billion in debt financing. This funding will be used to lease Nvidia H100 GPUs, vital for scaling Grok’s training and inference capabilities. Musk’s ambition is to eventually deploy the equivalent of 50 million H100 chips, putting xAI in direct competition with OpenAI and Meta.
So far, xAI has already raised $17 billion across multiple rounds. If successful, this new investment could push its valuation to between $170–$200 billion, signaling investor confidence in Musk’s vision.
Elon Musk’s Vision: From Social Media to Super AI
Musk isn’t just building AI infrastructure—he’s integrating it directly into X. In March 2025, xAI acquired X in an all-stock transaction that valued the AI startup at $80 billion and the social media platform at $33 billion. The acquisition aligned Grok’s development with X’s massive user data pipeline.
Grok now plays a central role in the user experience on X. From search to content recommendations, Musk envisions a platform where AI interaction becomes the core offering. He has even introduced premium tiers allowing users to access more advanced Grok features.
AI Revenue is Rising—But Risks Remain
While the xAI funding expansion may position Musk as a major AI competitor, it’s not without challenges. Several Grok models have drawn criticism for misinformation, content moderation issues, and the use of “NSFW AI bots” that some deemed inappropriate for general audiences.
Additionally, Musk’s approach to direct input on AI training and user feedback has sparked concerns among industry observers about ethical oversight and transparency. Some investors remain cautious, especially as global regulations around AI tighten.
Despite this, user demand has surged. Downloads of the Grok-enabled X app have consistently ranked in the top 20 across app stores, and subscription renewals have exceeded projections.
What’s Next for xAI and X?
The immediate focus is closing the current funding round, expected to wrap by Q4 2025. Private equity firms like Valor Equity Partners and Saudi Arabia’s Public Investment Fund (PIF) are reportedly among potential backers.
If xAI reaches its $200 billion valuation goal, it could leapfrog legacy tech giants and cement its role in shaping the future of social AI.
By aligning deep learning infrastructure with platform-level integration, Musk is aiming for a new business model: one where content creation, moderation, and monetization are all managed through advanced AI—reducing the platform’s dependency on traditional advertising.
