Elon Musk's xAI Secures $10 Billion in Funding Amid Intensifying AI Competition

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

June 30 (Reuters) - Elon Musk's xAI has completed a $5 billion debt raise alongside a separate $5 billion strategic equity investment, Morgan Stanley (MS.N), opens new tab 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. 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 Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Elon Musk's xAI Secures $10 Billion In Debt And Equity Amid Soaring Burn Rate As AI Arms Race Intensifies - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Elon Musk's xAI has successfully secured a massive $10 billion in fresh debt and equity. This move is a bid to expand AI infrastructure through data centers, amidst intensifying industry competition. What Happened: Musk's xAI has completed a $5 billion debt raise alongside a separate $5 billion strategic equity investment, reported Reuters. Morgan Stanley MS said, in a post on X, that the debt raise includes financing of secured notes and term loans. The bank said the deal was oversubscribed and attracted prominent global debt investors. The equity investment is aimed at supporting xAI's continued development of AI solutions, a data center, and its flagship Grok platform, the bank stated. See Also: Trump Says He'll Skip Trade Deals, Set Global Tariffs With A Letter: 'Pay A 25% Tariff, Or 20%, Or 40 Or 50%' The company is also 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. Why It Matters: This recent development comes just weeks after reports emerged that xAI was rapidly exhausting its financial reserves, with estimates suggesting a staggering monthly expenditure of approximately $1 billion. This underscores the extraordinary capital demands of developing sophisticated AI systems in today's fiercely competitive landscape, raising crucial questions for investors regarding the long-term viability of AI startups operating outside the umbrella of tech giants with deep pockets. According to an earlier report, xAI had also been in talks to raise $4.3 billion through an equity investment on top of its $5 billion debt funding plans. This move, coupled with the recent debt and equity raise, signifies xAI's aggressive pursuit of capital to stay ahead in the AI arms race. Meanwhile, the AI industry has been witnessing significant shifts, with major players like Alphabet Inc. GOOGL GOOG and Microsoft Corporation MSFT making strategic moves to advance their AI capabilities. This latest development from xAI is expected to further intensify the competition in the industry. Photo Courtesy: JRdes on Shuttertsock.com Read Next: Mark Zuckerberg Once Predicted That This Technology Would Replace Your Phone -- A Decade Later, How Far Is Meta From Delivering On A 'More Natural' Future Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. GOOGAlphabet Inc$177.29-0.55%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum32.91Growth86.76Quality86.14Value52.36Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$176.30-1.25%MSMorgan Stanley$140.55-0.10%MSFTMicrosoft Corp$497.350.28%Market News and Data brought to you by Benzinga APIs

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

(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. 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)