Elon Musk’s AI startup xAI has secured $5 billion in debt financing along with a separate $5 billion strategic equity investment, according to Morgan Stanley.
The funds will support the company’s plans to expand its AI infrastructure, including new data centers, as competition in the AI sector intensifies.
The $5 billion raised in debt consists of financing of secured notes and term loans, Morgan Stanley in a statement posted on social media platform X. The deal was oversubscribed and included prominent global debt investors, it added.
Reuters earlier reported that xAI was on track to close on a $5 billion debt raise led by Morgan Stanley, despite tepid investor demand. In a separate report, Bloomberg News said that xAI was in talks to raise $4.3 billion through an equity investment on top of its $5 billion debt funding plans.
XAI did not immediately respond to a Reuters request for comment outside regular business hours.
The proceeds will support xAI's continued development of AI solutions, a data center and its flagship Grok platform, the bank said.
Apart from selling debt, xAI has also been in talks to raise about $20 billion in equity, which would value the company at more than $120 billion, with some investors placing valuations as high as $200 billion.
