The Wall Street Journal (WSJ) reported on the 12th that SpaceX, a space development company run by Elon Musk, has decided to invest 2 billion dollars in xAI, an artificial intelligence (AI) startup founded and run by the same person.<\/p>\n
This is part of the equity investment in xAI announced by Morgan Stanley last month, and accounts for 40% of the 5 billion dollars in total. This is the first time that SpaceX has decided to invest in xAI has been known.<\/p>\n
Recently, SpaceX was known to have over $3 billion in internal cash holdings, but it has not been very active in investing in other companies. The acquisition of satellite communications company ‘Swarm Technologies’ for $524 million in 2021 is a recent major external investment by SpaceX.<\/p>\n
Musk has mobilized his other affiliates to grow xAI.<\/p>\n
When he announced that xAI had acquired social media X in March of this year, he valued X at $33 billion and xAI at $80 billion. Musk has often used SpaceX to support other businesses he operates. He personally borrowed $20 million (28 billion won) from SpaceX to fund the early founding of Tesla and used SpaceX equipment when he founded the tunnel boring company ‘The Boring Company’.<\/p>\n
Just before acquiring Twitter, the predecessor to X, in October 2022, Musk personally borrowed $1 billion from SpaceX, which he paid back the following month after the acquisition was finalized. SpaceX\u2019s investment in xAI could be risky for SpaceX, the WSJ pointed out.<\/p>\n
SpaceX’s revenue has surged in recent years, but its Starship rocket, which is under development, has been delayed due to successive test flight failures and a large explosion during an engine test last month. The WSJ pointed out that xAI, which is recognized as a highly valuable company, spends tens of billions of dollars annually to train AI models, and that competing AI companies are also experiencing this cash pressure.<\/p>\n
The WSJ quoted an investor as saying that xAI raised $5 billion in debt along with equity investment and is expected to raise more funds within the year.<\/p>\n","protected":false},"excerpt":{"rendered":"