Elon Musk's xAI is reportedly raising $10 billion at a $200 billion valuation, despite Musk calling the report "fake news" and stating that no capital is being raised currently. The company has faced controversy over its Grok chatbot and is in a competitive landscape with other AI firms like OpenAI and Anthropic. Proceeds from the funding are expected to be used for data centers and hiring talent to enhance AI capabilities.