Elon Musk's artificial intelligence startup, xAI, is making significant strides in the AI sector, evidenced by its recent successful funding round. The company has secured $10 billion in debt and equity financing, catapulting its valuation to an impressive $75 billion. This substantial capital injection underscores the robust investor confidence in xAI's vision and its potential to compete with industry giants like OpenAI.

The funding will be instrumental in fueling xAI's ambitious projects, particularly the development of its advanced Grok AI model and the construction of expansive data centers. These data centers are expected to be among the largest in the world, providing the necessary infrastructure to support the training and deployment of increasingly sophisticated AI models. The latest version of their AI model, Grok 4, is expected to launch after July 4, 2025.

Notably, xAI has also been exploring additional fundraising opportunities, with potential talks to raise another $20 billion in equity, which could potentially value the company at $120 billion. In December 2024, xAI successfully raised $6 billion from investors including Andreessen Horowitz and BlackRock. These funds were specifically allocated towards constructing an AI data center and enhancing the Grok model.

However, xAI's rising prominence coincides with escalating political tensions involving its CEO, Elon Musk, and former U.S. President Donald Trump. The conflict stems from Musk's vocal criticism of Trump's proposed tax bill, which Musk believes will significantly increase the national debt. In response, Musk has pledged to financially support primary challengers against Republican lawmakers who endorse Trump's tax plan. He has also floated the idea of establishing a new "America Party" to offer an alternative to the existing two-party system.

Trump retaliated by suggesting that Musk's companies, including Tesla and SpaceX, heavily rely on government subsidies and would struggle to survive without them. Trump even quipped that Musk might have to "close up shop and head back home to South Africa" if those subsidies were to be revoked. Further intensifying the conflict, Trump hinted at using the Department of Government Efficiency (DOGE) to scrutinize the subsidies received by Musk's ventures. Ironically, Musk himself spearheaded DOGE until May 2025, focusing on reducing fraud and waste in government spending.

Musk responded to Trump's threats by calling for an end to all subsidies for his companies. The clash highlights the contrasting views on government support for businesses and the increasing intersection of technology, politics, and public discourse.