Elon Musk's xAI raises $20 billion as Grok is investigated for deepfakes

Elon Musk's artificial intelligence company xAI has raised $20 billion in an upsized Series E funding round, the company announced on Tuesday. The news comes days after the company's next generation intelligent assistant Grok came under scrutiny for generating nonconsensual sexualized images.

The original target for the funding round was $15 billion, xAI said, but ended up raising $5 billion more from an A list of investors including Fidelity, Valor, Stepstone, Baron, Qatar Investment Authority, MGX, as well as Nvidia's and Cisco's investment arms.

The company is currently training its next generation intelligent assistant, Grok 5, and is also working on "innovative new consumer and enterprise products that harness the power of Grok, Colossus, and 𝕏 to transform how we live, work, and play."

The money raised will be used for infrastructure buildout, new research, and hiring, with the company saying it's "aggressively" hiring to build a team "focused on making a transformational impact on the future of humanity."

In a blog post announcing the funding round, xAI highlighted some of its successes in 2025, including launching Grok 4 series, Grok's voice mode, image generation tool Grok Imagine, and using Grok to leverage the X platform to "understand what's happening in the world in real-time."

The announcement comes days after X users noticed that the platform's AI chatbot Grok will readily generate nonconsensual sexualized images, including those of children. These images were incredibly easy to find — all one had to do was check Grok's "Media" tab on X and see that it basically consists of sexualized images of women, both celebrities and private citizens.

Following the outrage from users, several foreign governments, including those of Malaysia, India, and France, launched investigations into Grok. Musk responded to the issue by tweeting that "anyone using Grok to make illegal content will suffer the same consequences as if they upload illegal content."

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As of writing time Grok's Media tab on X has gotten better in this regard, but still contains numerous sexualized images of various people.