SpaceX to invest $2 billion in Elon Musk's xAI, maker of Grok AI chatbot: What it means for the world's richest person's tech empire

Elon Musk's SpaceX has agreed to inject $2 billion into his artificial intelligence venture, xAI, that makes up nearly half of the Grok chatbot maker's recent equity fundraising round, a report by The Wall Street Journal has said. This comes after Musk merged xAI with X (formerly Twitter), combining the AI research lab with the social media platform to amplify the reach of its Grok chatbot. That merger valued the newly combined entity at $113 billion. The move suggests Musk's strategy of leveraging his various companies to propel xAI forward in the competitive AI landscape at a time when tech companies like Meta and OpenAI are strengthening their AI teams.

This is SpaceX's largest external investment to date
The $2 billion investment from SpaceX is part of xAI's broader $5 billion equity fundraise, which Morgan Stanley announced last month. This marks SpaceX's first known and one of its largest investments in an external company, signaling a deeper integration of Musk's corporate empire .

Since his departure from the Trump administration, Musk has focused on training the latest version of Grok which Musk declared as “the smartest AI in the world,” though Grok's user adoption hasn't yet rivaled OpenAI's ChatGPT.

Notably, Grok recently generated racist and controversial comments on X, prompting xAI to issue an apology and confirm an investigation into the “horrific behaviour.”

Grok is being utilised to support some SpaceX features
Grok is already being utilised to power customer-support features for SpaceX's Starlink satellite internet service, as reported by The Wall Street Journal. Investors who have spoken with Musk's representatives indicate that further business partnerships between SpaceX and xAI are anticipated.

Musk also stated this week, during the release of Grok 4, that he intends to embed Grok into humanoid robots, including Tesla's Optimus fleet.

Musk has a history of using SpaceX to support his other ventures. He previously borrowed $20 million from SpaceX to help fund Tesla in its early days and utilised SpaceX equipment for The Boring Company. More recently, he secured a $1 billion loan from SpaceX during his acquisition of Twitter, which he subsequently repaid.