Elon Musk’s AI venture xAI, has initiated a bold financial move by locking in a $5 billion debt package with the help of Morgan Stanley. This funding is set to fuel the company’s expansion into the fast-evolving artificial intelligence space.
What’s the Deal?
Total Amount: $5 billion
Lead Underwriter: Morgan Stanley
Loan Structure: Includes a Term Loan B, fixed-interest term financing, and senior secured notes Objective: Infrastructure development and strategic AI growth
The financing deal, offered at notably high interest rates, reflects the calculated risk investors are willing to take on Musk’s ambitious AI vision.
Valuation Goals & Employee Liquidity
- Alongside the debt raise, xAI is actively:
- Running a $300 million secondary stock sale
- Targeting a valuation of $113 billion
- Allowing early employees to sell their shares
- Preparing for a larger fundraising round later in 2025
This places xAI among the highest-valued AI companies globally — remarkable for a firm founded only recently.
Big Moves in Artificial Intelligence
Founded by Elon Musk as an alternative to companies like OpenAI, xAI has already:
- Launched its AI assistant Grok, integrated into the X (formerly Twitter) platform
- Begun construction of a massive supercomputer named Colossus, designed to train the next generation of AI models
- Positioned itself at the intersection of social media and AI, pushing toward a vertically integrated ecosystem
