Musk's xAI raises $5 billion each in fresh debt and equity, Morgan Stanley says

MaddieBusiness2025-07-011110

(Reuters) -Elon Musk's xAI has completed a $5 billion debt raise alongside a separate $5 billion strategic equity investment, Morgan Stanley said on Monday, as the startup looks to expand its AI infrastructure through data centres amid intensifying competition in the industry.

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.

FILE PHOTO: Illustration shows 3D-printed miniature model of Elon Musk and xAI logo

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.

(Reporting by Ananya Palyekar and Gursimran Kaur in Bengaluru; Editing by Alan Barona)

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