Elon Musk is in talks with top Middle Eastern investors to potentially double his AI start-up xAI’s valuation to $45 billion. He’s approached sovereign wealth funds in Qatar and Saudi Arabia, along with current investors like Sequoia Capital and Valor Equity Partners, as he seeks fresh capital to rival OpenAI, valued recently at $150 billion.
Valor is expected to lead this round, though terms are still flexible. This interest in xAI reflects the Gulf states’ ambitions to lead in AI, backed by significant financial resources. Musk’s recent engagement with Saudi Arabia also marks a shift after past tensions with the kingdom over his 2018 Tesla take-private attempt.
Musk’s growing involvement in the U.S. presidential race has aligned him with Trump supporters, and he’s using his platform X to amplify this position.
AI start-ups have drawn over 40% of U.S. venture funding this year. So, xAI’s pursuit of Gulf capital reflects the industry’s constant need for funds to support the massive computing resources needed for AI model training.