Elon Musk's artificial intelligence startup xAI has raised $10 billion through a combination of debt and equity financing, according to Morgan Stanley. The funding is split evenly between $5 billion in secured notes and term loans and $5 billion in strategic equity investment.

The massive capital injection will fuel xAI's infrastructure expansion and development of its Grok AI chatbot, as the company continues to compete against declared enemy OpenAI, and other leading names, including Amazon-backed Anthropic. Musk recently stated to the news outlet CNBC that xAI has already installed 200,000 GPUs at its Colossus supercomputer facility in Memphis, Tennessee, and that the company reportedly plans to build out a new facility housing 1 million more units outside of the city.

This latest round follows xAI's $6 billion fundraising effort, which took place last year and valued the company at $50 billion. The current funding pales when compared to OpenAI's fundraising efforts, as the startup recently closed a record-breaking $40 billion round at a $300 billion valuation. In contrast, xAI remains competitive with Anthropic, which last reported a $61.5 billion post-money valuation after closing a $3.5B Series E this March.

Musk has positioned Grok as a "maximally truth-seeking" and "anti-woke" alternative to competitors, integrating it with his X social media platform. However, the chatbot has faced controversy over problematic responses. Just today, Grok's automated X account was temporarily taken offline after going on yet another anti-semitic, Hitler-praising rant. The company attributed Grok's posts to a (now-edited) system prompt that read "The response should not shy away from making claims which are politically incorrect, as long as they are well substantiated."

Musk and xAI are expected to unveil Grok 4, the latest major upgrade to their generative AI model, tonight.