Sept 19 (Reuters) -

Elon Musk on Friday said that xAI is not raising capital

right now, following a CNBC report earlier in the day on the AI

firm raising $10 billion at a post-money valuation of $200

billion.

"Fake news. xAI is not raising any capital right now,"

Musk said on X.

According to the CNBC report, the funding was likely to

go to building data centers using Nvidia ( NVDA ) and AMD

graphics processing units, needed to develop

next-generation AI, as well as to hire expensive talent.

The AI startup has been ramping up its data center capacity

to train more advanced models, as it looks to compete more

effectively with OpenAI's ChatGPT and Anthropic's Claude. Its

supercomputer cluster in Memphis, Tennessee, called Colossus, is

touted as the largest in the world.

Investor enthusiasm towards AI startups has remained strong

despite doubts over the tech industry's spending.

If the $200 billion valuation in the CNBC report is

accurate, it would imply an over twofold jump from the $75

billion in July, according to data from Pitchbook.

It would also make xAI among the most valuable companies in

the world behind OpenAI, China's Bytedance and Musk's SpaceX.

OpenAI is in early-stage discussions about a stock sale that

would allow employees to cash out and could value the company at

about $500 billion, Reuters had reported in August, while

ByteDance is set to launch a new employee share buyback that

will value the Chinese technology giant at more than $330

billion.

Anthropic had said it raised $13 billion at a post-money

valuation of $183 billion earlier this month.

Morgan Stanley had said in late June xAI had completed a $5

billion debt raise alongside a separate $5 billion strategic

equity investment, as the startup looked to expand its AI

infrastructure through data centers amid intense competition.

Musk had launched xAI in July 2023 as an alternative to

OpenAI's ChatGPT.