According to reports, Elon Musk’s XAI Holdings is in talks with investors to raise roughly $20 billion in funding for his newly combined artificial intelligence startup and social media business.

If finalized, the potential agreement would mark the second biggest startup funding round ever as per the data provider PitchBook, following OpenAI’s $40 billion funding earlier this year.

According to reports, who requested anonymity due to the confidential nature of the information, the deal would apprise the company at over $120 billion.

Launched in March, XAI Holdings was formed from the merger of X, previously known as Twitter, and Musk’s AI initiative, xAI. The additional financing might be allocated to reduce some of the debt that Musk incurred when he transformed Twitter into a private entity, subsequently rebranding it as X.

That obligation has been burdening X. In March, X reportedly spent around $200 million on debt-servicing expenses associated with its buyout, as per individuals informed about the situation. By the conclusion of 2024, the company's yearly interest cost exceeded $1.3 billion.

Since the merger, Musk and his team have been gauging investors' interest in contributing additional funds to the merged company. Discussions for a potential funding round are just getting started, and the company intends to secure the financing in the coming months.

According to reports, the total in the round might exceed $20 billion. The final amount has not been determined yet, and conditions may vary.

The magnitude of the latest funding round highlights the excitement of investors toward AI firms, as well as Musk’s position as a business leader and political influencer.

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Musk, a significant supporter of President Donald Trump, is anticipated to soon depart from Washington, but he has implemented extensive changes in the government following Trump’s election and placed important allies in influential roles there.