Elon Musk’s artificial intelligence start-up xAI is in talks to raise $4.3 billion through an equity investment on top of its $5 billion debt funding plans, Bloomberg News reported on Tuesday, citing information shared with investors.

Between its founding in 2023 and the debt sale this year, xAI raised $14 billion through equity fundraising, the report said.

Training and deploying advanced AI systems are exceedingly expensive, driven by costly hardware, intensive computing and the need for skilled employees in a fiercely competitive market.

The Grok chatbot maker needs new funding, partly because it has already spent most of what it previously raised, according to the report.

Commitments for the $5 billion debt sale are due Tuesday, the report said, citing a person with knowledge of the matter.

Additionally, xAI may also get a $650 million rebate from one of its manufacturers that will help the firm cut costs, according to the report.

xAI, which acquired X earlier this year, is said to have a valuation of $80 billion at the end of the first quarter, up from $51 billion at the end of 2024, the report said.

Rival OpenAI had said in March it would raise up to $40 billion at a $300 billion valuation in a new funding round led by SoftBank Group. Musk co-founded OpenAI in 2015, but stepped down from the company’s board in 2018.

In February, Musk, 53, made a $97.4 billion bid with a consortium for OpenAI, which was rejected and he has sued to prevent the ChatGPT maker from converting from a non-profit to a for-profit business.