Elon Musk’s artificial intelligence startup, xAI, has successfully raised a staggering $10 billion in new capital, consisting of $5 billion in debt financing and a separate $5 billion strategic equity investment.
Morgan Stanley (MS.N) confirmed the completion of these funding rounds on Monday, as xAI gears up to significantly expand its AI infrastructure, particularly through data centers, amidst fierce industry competition.
The $5 billion debt raise was secured through notes and term loans, with Morgan Stanley leading the financing. The bank reported on X (formerly Twitter) that this debt offering was oversubscribed, drawing interest from prominent global debt investors. This successful debt raise comes despite earlier reports of tepid investor demand.
Separately, xAI finalized a $5 billion equity investment. This follows previous discussions where xAI was reportedly seeking to raise around $4.3 billion in equity in addition to its debt plans. While xAI did not immediately respond to requests for comment, Morgan Stanley stated the combined proceeds would directly support the continued development of AI solutions, the establishment of a data center, and further enhancement of its flagship platform, Grok.
These funding rounds are part of xAI’s broader ambition, with the company reportedly in talks to raise up to $20 billion in equity, which could value the firm at over $120 billion, and some investors even projecting valuations as high as $200 billion. The substantial capital infusion positions xAI to intensify its efforts in the rapidly evolving AI landscape.
