The fundraise could value xAI at up to $20 billion, according to the report.
Thanks to the popularity of OpenAI's chatbot ChatGPT, the AI industry has been a rare bright spot in a subdued start-up funding environment.
Google-backed Anthropic and Microsoft-backed Inflection AI have also raised funds in recent months.
Musk's AI start-up has been in talks with family offices in Hong Kong and is targeting sovereign wealth funds in the Middle East, the Financial Times reported.
Musk has also approached investors in Japan and South Korea, the report said. Musk's office did not immediately respond to a Reuters request for comment.
The billionaire CEO of Tesla has been vocal about his plans to build safer AI. Last year, the start-up xAI launched "Grok", a chatbot rivaling ChatGPT.
Last month, xAI filed with the U.S. Securities and Exchange Commission to raise up to $1 billion in an equity offering.
Musk warned about developing AI and robotics outside Tesla, earlier this month, unless he gets more voting control at the electric-vehicle maker. He said he would be uncomfortable building Tesla into an AI leader unless he had 25% voting control.
Last week, Musk denied a report that xAI had secured $500 million in commitments from investors toward a $1 billion funding goal.
(Reporting by Urvi Dugar, Niket Nishant and Akash Sriram in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)
