Elon Musk’s xAI Raises $10B via Debt & Equity Funding

According to Morgan Stanley, Elon Musk’s artificial intelligence initiative, xAI, has raised $10 billion in debt and equity. Morgan Stanley disclosed the deal, comprising about $5 billion in secured notes and term loans and $5 billion from strategic equity investments, in a statement published on Monday. The funds will be used to roll out more of the AI infrastructure at xAI, especially expediting the construction of advanced data centres.

Morgan Stanley noted that the debt deal was oversubscribed and highlighted that it had attracted several prominent global debt investors. The capital raised will strengthen xAI’s flagship product, Grok, and add to the firm’s research and development capabilities.

The news comes as the race heats up in the AI sector, with companies increasing efforts to build the infrastructure, specifically the computer infrastructure, that will allow them to scale. Bloomberg had previously reported that xAI is also in talks to raise another $20 billion in equity, which could push the company’s valuation to $120 billion, with some estimates indicating as high as $200 billion.

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xAI has not yet issued an official statement, but industry experts see this dual raise as an important milestone in its goal of becoming a formidable competitor to the sector’s leading players, such as OpenAI and Anthropic.