xAI Raises $20B as Nvidia, Cisco Back Musk

Elon Musk’s xAI has closed an upsized Series E round worth $20 billion, drawing backing from investors including Nvidia, Cisco Investments and Fidelity and building momentum around its rapidly expanding AI infrastructure plans. The raise comes as regulators in multiple countries scrutinize Grok-generated exploitative imagery circulating on X, while xAI pushes ahead with data-center expansion and new government partnerships.

Funding round and valuation

xAI said the financing totals $20 billion, above an earlier $15 billion target for the round. CNBC previously reported that a financing round could value the company at about $230 billion, and Musk publicly disputed an earlier report about a $15 billion raise before the final figure was announced. xAI said the new capital will speed up infrastructure buildout, product development, and research tied to its mission of “Understanding the Universe.”

• Round: Series E (upsized)

• Amount raised: $20 billion

• Prior target referenced in reporting/company statement: $15 billion

• Valuation cited in prior CNBC reporting: about $230 billion

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Investors and strategic partners

The round included financial investors Valor Equity Partners, Stepstone Group, Fidelity Management & Research Company, Qatar Investment Authority, Abu Dhabi’s MGX and Baron Capital Group, alongside strategic investors Nvidia and Cisco Investments. CNBC also noted Nvidia and Cisco work with xAI as vendors and strategic partners. xAI positioned the strategic participation as support for scaling compute infrastructure and building some of the world’s largest GPU clusters.

• Named investors: Valor Equity Partners, Stepstone Group, Fidelity, Qatar Investment Authority, MGX, Baron Capital Group

• Strategic investors: Nvidia, Cisco Investments

• Nvidia/Cisco roles referenced: vendor + strategic partner relationships with xAI

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Compute push and product roadmap

In its Series E announcement, xAI highlighted its Colossus I and II supercomputer sites and said it ended 2025 with “over one million H100 GPU equivalents.” The company also pointed to recent product work across the Grok 4 series, Grok Voice, and Grok Imagine (image/video generation), and said Grok 5 is currently in training. xAI additionally claimed its reach spans about 600 million monthly active users across the X and Grok apps.

• Infrastructure: Colossus I and II supercomputers; “over one million H100 GPU equivalents” (company claim)

• Product highlights: Grok 4 series, Grok Voice, Grok Imagine

• Next model: Grok 5 “currently in training” (company statement)

• Scale metric: ~600M monthly active users across X + Grok apps (company statement)

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Controversies, probes, and government deals

CNBC reported that xAI is facing regulatory probes in Europe, India and Malaysia after Grok generated sexualized images of children and non-consensual intimate images of adults that spread widely on X. Separate reporting has also described UK regulator Ofcom seeking information and the European Commission saying it is examining the issue, alongside actions or reviews cited in countries including France, Malaysia and India. On the infrastructure side, CNBC reported xAI’s Memphis, Tennessee data centers rely on natural gas-burning turbines and have drawn backlash tied to air-quality concerns, while a NAACP statement says a local permit would allow 15 methane gas turbines to run 24/7 and alleges dozens more turbines were installed previously without proper permitting. Despite the controversy, the U.S. Department of War said it entered an agreement to add xAI’s Grok-family models to GenAI.mil with an initial deployment targeted for early 2026, enabling use at Impact Level 5 for handling Controlled Unclassified Information, and CNBC also noted Grok being used as the main chatbot for prediction platforms Polymarket and Kalshi.

• Probes mentioned: Europe, India, Malaysia (per CNBC)

• Regulators referenced in reporting: Ofcom; European Commission

• Memphis permitting dispute: NAACP/advocacy appeal references 15 turbines; alleges 35 were installed earlier (claims)

• Government deal: GenAI.mil integration targeted early 2026; IL5 and CUI handling referenced in release