Beginnings (2023–2026) Elon Musk founded xAI on March 9, 2023. The company was founded with a team of eleven AI researchers, including Igor Babuschkin, formerly associated with
Google DeepMind, as chief engineer. Musk officially announced the formation of xAI on July 12, 2023. As of July 2023, xAI was headquartered in the
San Francisco Bay Area. It was initially incorporated in
Nevada as a
public-benefit corporation. By May 2024, it had dropped the public-benefit status. , Musk was diverting a large number of
Nvidia chips that had been ordered by
Tesla, Inc. to X and xAI. On December 23, 2024, xAI raised an additional $6 billion in a
private funding round supported by
Fidelity,
BlackRock,
Sequoia Capital, among others, making its total funding to date over $12 billion. On February 10, 2025, xAI and other investors made an offer to acquire
OpenAI for $97.4 billion. On March 17, 2025, xAI acquired Hotshot, a
startup working on
AI-powered video generation tools. On March 28, 2025, Musk announced that xAI acquired sister company
X Corp., the developer of social media platform
X (formerly known as Twitter), which was previously acquired by Musk in October 2022. The deal, an all-stock transaction, valued X at $33 billion, with a full valuation of $45 billion when factoring in $12 billion in debt. Meanwhile, xAI itself was valued at $80 billion. Both companies were combined into a single entity called X.AI Holdings Corp. On July 14, 2025,
United States Department of Defense announced that xAI had received a $200 million contract for AI in the military. On September 12, xAI laid off 500 data annotation workers. The division, previously the company's largest, had worked to train
Grok, xAI's chatbot. xAI purchased a third building on December 30, 2025 to increase its training capacity to nearly 2 gigawatts of compute power. Simultaneously, xAI announced plans to expand
Colossus to house at least 1 million graphics processing units.
Division of SpaceX, restructuring and rebranding (2026–present) On February 2, 2026,
SpaceX acquired xAI in an all-stock transaction that structured xAI as a wholly owned subsidiary of SpaceX. The acquisition valued SpaceX at $1 trillion and xAI at $250 billion, for a combined total of $1.25 trillion. Around this time, half of the company's co-founders left. Later in the month, Nordeen left, leaving Musk as the only remaining co-founder at the company. On April 10, 2026, xAI restructured its staff. Chief Financial Officer Anthony Armstrong, departed the company. Michael Nicolls, vice president of SpaceX's Starlink, became xAI's president. On April 21, 2026, xAI announced that it struck a deal with software company
Anysphere to have the right to acquire the company for $60 billion later this year, or to pay $10 billion for work they are doing together. In May 2026, Musk announced that xAI would cease to exist as a separate company, with Grok and X now being under the "SpaceXAI" AI and social media sub-brand from SpaceX. == Environmental impact ==