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Two of Elon Musk’s private companies are set to secure multibillion-dollar jumps in valuation through new deals, as investors race to back the sprawling business interests of the world’s richest man.
SpaceX, the largest private company in the US, is preparing to launch a tender offer in December that will sell existing shares in the business at about $135 each, according to people with knowledge of the discussions. That would value the rocket builder at more than $250bn, up from about $210bn during a similar deal earlier this year.
Meanwhile, Musk’s artificial intelligence start-up xAI has raised $5bn at a valuation of $45bn, almost double its valuation a few months ago, according to the people. The fundraising has been carried out at breakneck speed as discussions between Musk and his investors began just last month.
The double fundraising comes as Musk expands his focus beyond Silicon Valley to Washington DC, having helped to deliver the US election to Donald Trump earlier this month and becoming a key confidant to the president-elect.
On Tuesday, Trump appointed Musk and Vivek Ramaswamy, a biotech entrepreneur and former presidential hopeful, to lead a new “department of government efficiency”. It will “provide advice and guidance from outside of government” and look for ways to “dismantle” bureaucracy, Trump said in a statement.
Musk’s proximity to Trump has also helped to boost the share price of Tesla, the electric vehicle-maker he runs as chief executive, by almost 30 per cent since the November 5 election.
The people close to the xAI fundraising said the deal had been “fully allocated”, meaning all of the new shares had been assigned to investors, although it will not formally close until the end of the month. They added that the deal was oversubscribed and featured only investors who had backed the start-up in its previous fundraising round.
The significant interest in xAI, which operates a ChatGPT rival called Grok, has fuelled Musk’s efforts to compete with rivals such as OpenAI and Anthropic.
It has also already prompted speculation about a subsequent fundraising in the first quarter of next year that could value the company at as much as $75bn, according to two of the people. However, it was not yet clear if this had been communicated directly to investors by xAI.
xAI has been developing an enormous cluster of 100,000 graphics processing units, the chips used to train and run AI tools, in Memphis. The project, nicknamed Colossus, would be one of the biggest supercomputers in the world. Musk’s AI systems are likely to play a critical role across his many enterprises, which include X, Tesla, SpaceX and Neuralink.
SpaceX is also likely to benefit from closeness to Trump. As well as a long-stated ambition to launch a mission to Mars, Musk wants to add to the company’s network of 6,000 low Earth orbit satellites that constitute its Starlink broadband network. The billionaire has also regularly fought battles with an array of US regulators that he believes have stymied Tesla and SpaceX.
SpaceX declined to comment. Musk did not immediately respond to requests for comment.