xAI Secures $10 Billion in Funding to Boost AI Infrastructure and Challenge Competitors

xAI raises $10B in debt and equity | TechCrunch

Elon Musk's AI company, xAI, has raised $10 billion in debt and equity, Morgan Stanley confirmed on Monday. In a post on X, the financial giant said xAI had raised $5 billion in debt and another $5 billion in a separate strategic equity transaction. "The combination of debt and equity reduces the overall cost of capital and substantially expands pools of capital available to xAI. The proceeds will support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data center [sic] and its flagship Grok platform," Morgan Stanley wrote. xAI did not immediately return a request for comment outside regular business hours. This latest funding follows a $6 billion round that the company raised in December from a slate of big name investors, including Andreessen Horowitz, Blackrock, Fidelity, Lightspeed, MGX, Morgan Stanley, OIA, QIA, Sequoia Capital, Valor Equity Partners, Vy Capital, Nvidia, AMD, and Kingdom Holdings, a Saudi conglomerate. The new equity round brings xAI's total capital raised to about $17 billion.

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 raises $10 billion in debt and equity as it steps up challenge to OpenAI

Elon Musk announced his new company xAI, which he says has the goal to understand the true nature of the universe. XAI, the artificial intelligence startup run by Elon Musk, raised a combined $10 billion in debt and equity, Morgan Stanley said. Half of that sum was clinched through secured notes and term loans, while a separate $5 billion was secured through strategic equity investment, the bank said on Monday. The funding gives xAI more firepower to build out infrastructure and develop its Grok AI chatbot as it looks to compete with bitter rival OpenAI, as well as with a swathe of other players including Amazon-backed Anthropic. In May, Musk told CNBC that xAI has already installed 200,000 graphics processing units (GPUs) at its Colossus facility in Memphis, Tennessee. Colossus is xAI's supercomputer that trains the firm's AI. Musk at the time said that his company will continue buying chips from semiconductor giants Nvidia and AMD and that xAI is planning a 1-million-GPU facility outside of Memphis. Addressing the latest funds raised by the company, Morgan Stanley that "the proceeds will support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data center and its flagship Grok platform." xAI continues to release updates to Grok and unveiled the Grok 3 AI model in February. Musk has sought to boost the use of Grok by integrating the AI model with the X social media platform, formerly known as Twitter. In March, xAI acquired X in a deal that valued the site at $33 billion and the AI firm at $80 billion. It's unclear if the new equity raise has changed that valuation. Morgan Stanley said the latest debt offering was "oversubscribed and included prominent global debt investors." Competition among American AI startups is intensifying, with companies raising huge amounts of funding to buy chips and build infrastructure. OpenAI in March closed a $40 billion financing round that valued the ChatGPT developer at $300 billion. Its big investors include Microsoft and Japan's SoftBank. Anthropic, the developer of the Claude chatbot, closed a funding round in March that valued the firm at $61.5 billion. The company then received a five-year $2.5 billion revolving credit line in May. Musk has called Grok a "maximally truth-seeking" AI that is also "anti-woke," in a bid to set it apart from its rivals. But this has not come without its fair share of controversy. Earlier this year, Grok responded to user queries with unrelated comments about the controversial topic of "white genocide" and South Africa. Musk has also clashed with fellow AI leaders, including OpenAI's Sam Altman. Most famously, Musk claimed that OpenAI, which he co-founded, has deviated from its original mission of developing AI to benefit humanity as a nonprofit and is instead focused on commercial success. In February, Musk alongside a group of investors, put in a bid of $97.4 billion to buy control of OpenAI. Altman swiftly rejected the offer.

Elon Musk's xAI raises $10B to upgrade its AI infrastructure - SiliconANGLE

Elon Musk's xAI Holdings Corp. has raised $10 billion from investors to finance artificial intelligence initiatives. The deal was announced today by Morgan Stanley, which helped the company raise the funds. The investment comprised $5 billion in equity funding and $5 billion worth of loans. Some of the loans were structured as secured notes, which means that xAI provided collateral to lenders. A number of other players in the AI market have used their graphics cards as collateral to raise debt. Morgan Stanley stated that the investment will "support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data centers and its flagship Grok platform." Last year, xAI built a sprawling data center in Memphis to support its AI training efforts. The facility houses a supercomputer called Colossus that featured 100,000 graphics cards when it first came online. This past May, xAI disclosed that the system's AI accelerator count has since doubled. The company plans to deploy another 800,000 graphics cards down the road. The $10 billion round disclosed today should make it easier for xAI to finance the initiative. To support its infrastructure roadmap, the company bought a 1 million-square-foot site in Memphis earlier this year. The deal was reportedly worth $80 million. The campus, which is located near a power plant, is expected to host a data center with up to 350,000 graphics cards. At times when household power consumption is high, the amount of electricity available to data centers can decrease. To mitigate the impact of such fluctuations, xAI recently deployed more than 165 Megapack energy storage systems at its new Memphis site. The batteries, which are made by Tesla Corp., can each hold 3.9 megawatt hours of electricity. That's enough to power about 3,600 homes for one hour. Alongside the energy storage array, xAI is building what it describes as the world's largest ceramic membrane. It's a water treatment system that can make wastewater suitable for data center cooling. According to xAI, the system will make it possible to reuse more than 13 million gallons of wastewater per day. The company is using Colossus to power its flagship Grok series of large language models. The newest addition to the series, Grok 3, debuted in February. It was trained using 10 times more hardware than the company's earlier LLMs and performs reasoning tasks more reliably.

xAI raises another $10B to upgrade its AI infrastructure - SiliconANGLE

Elon Musk's xAI Holdings Corp. has raised $10 billion from investors to finance artificial intelligence initiatives. The deal was announced today by Morgan Stanley, which helped the company raise the funds. The investment comprised $5 billion in equity funding and $5 billion worth of loans. Some of the loans were structured as secured notes, which means that xAI provided collateral to lenders. A number of other players in the AI market have used their graphics cards as collateral to raise debt. Morgan Stanley stated that the investment will "support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data centers and its flagship Grok platform." Last year, xAI built a sprawling data center in Memphis to support its AI training efforts. The facility houses a supercomputer called Colossus that featured 100,000 graphics cards when it first came online. This past May, xAI disclosed that the system's AI accelerator count has since doubled. The company plans to deploy another 800,000 graphics cards down the road. The $10 billion round disclosed today should make it easier for xAI to finance the initiative. To support its infrastructure roadmap, the company bought a 1 million square foot site in Memphis earlier this year. The deal was reportedly worth $80 million. The campus, which is located near a power plant, is expected to host a data center with up to 350,000 graphics cards. At times when household power consumption is high, the amount of electricity available to data centers can decrease. To mitigate the impact of such fluctuations, xAI recently deployed more than 165 Megapack energy storage systems at its new Memphis site. The batteries, which are made by Tesla Corp., can each hold 3.9 megawatt hours of electricity. That's enough to power about 3,600 homes for one hour. Alongside the energy storage array, xAI is building what it describes as the world's largest ceramic membrane. It's a water treatment system that can make wastewater suitable for data center cooling. According to xAI, the system will make it possible to reuse more than 13 million gallons of wastewater per day. The company is using Colossus to power its flagship Grok series of large language models. The newest addition to the series, Grok 3, debuted in February. It was trained using ten times more hardware than the company's earlier LLMs and performs reasoning tasks more reliably.

Elon Musk's xAI raises $10B as Trump threatens to unleash DOGE on him

Elon Musk's xAI secures $10 billion to expand its AI operations as Musk's clash with President Donald Trump over government spending heats up again. Elon Musk's artificial intelligence firm xAI has secured $10 billion in fresh capital, doubling down on its challenge to OpenAI as the race to dominate the AI landscape intensifies. The funds were evenly split between secured debt and strategic equity investments. The influx gives xAI more resources to expand its Memphis-based Colossus supercomputer and train its Grok chatbot, CNBC reported Tuesday, citing Morgan Stanley. The funding round was reportedly oversubscribed, with major investors vying for a stake in Musk's AI vision. Musk's AI push comes as American rivals race ahead. OpenAI closed a $40 billion raise earlier this year at a staggering $300 billion valuation, while Anthropic secured fresh backing that pushed its value beyond $60 billion. In March, Musk sold his social media platform X to xAI, integrating Grok directly into the platform. The deal valued xAI at $80 billion and X at $33 billion, factoring in $12 billion in debt from the $45 billion valuation. He originally bought X, formerly Twitter, for around $44 billion in April 2022. Related: Bitcoin takes pressure off the US dollar -- US President Trump The recent raise comes as Musk's feud with US President Donald Trump has reignited. On Tuesday, Trump lashed out at Musk on Truth Social, claiming he owes his success to government subsidies and suggesting the federal Department of Government Efficiency (DOGE) should investigate Musk's businesses to cut costs. "No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!" Trump wrote. Musk fired back on X, declaring, "I am literally saying CUT IT ALL. Now," distancing himself from reliance on federal support. Their spat over government spending has rattled markets before, with Tesla losing $150 billion in value during a prior clash in June. The renewed hostilities come as Musk has ramped up his political commentary, warning lawmakers who supported the recent spending bill of potential primary challenges and calling for a new "Porky Pig Party" to counter what he sees as runaway government excess. Related: Trump sidesteps question on crypto divesting to pass key bills Meanwhile, Senator Cynthia Lummis has introduced an amendment to President Trump's tax and spending bill aimed at ending what she calls "unfair tax treatment" for crypto users. The proposal would waive taxes on digital asset transactions under $300, with a $5,000 annual cap, and delay taxes on crypto earned through mining, staking, or airdrops until the assets are sold. It would also apply the 30-day wash sale rule to crypto, limiting quick tax-loss strategies. Earlier, the Senate rejected a Democrat-sponsored amendment that sought to ban government officials and their families from owning or promoting cryptocurrencies, including memecoins and NFTs, for up to a year after leaving office.

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

xAi Funding: Elon Musk Artificial Intelligence Company Raises $10 Billion

The funding consists of $5 billion in debt and $5 billion in strategic equity investments. Elon Musk's artificial intelligence company, xAI, has secured a staggering $10 billion in fresh funding, fueling its ambitious plans to solidify its position in the AI space. With $5 billion raised through secured debt and another $5 billion from strategic equity investments, xAI is poised to accelerate the development of its cutting-edge AI infrastructure. Elon Musk's xAi Secures $10B for AI Dominance According to a CNBC report today, Elon Musk's artificial intelligence firm xAI has raised a combined $10 billion in debt and equity. On Monday, Morgan Stanley revealed that xAI secured $5 billion through secured notes and term loans, while also obtaining a separate $5 billion strategic equity investment. The platform's initiative focuses on challenging OpenAI's dominance in the space. Notably, the funding is focused on the platform's AI infrastructure and its dominance in the space. These include the expansion of its Memphis-based Colossus supercomputer and the advancement of its conversational AI platform, Grok. Morgan Stanley stated, "The proceeds will support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data center and its flagship Grok platform." It is noteworthy that this major development comes on the heels of the escalating Donald Trump-Elon Musk feud. Earlier today, Trump criticized Musk, saying that his success is largely due to government subsidies. Trump threatened Musk with a potential DOGE investigation into his businesses. Trump wrote on Truth Social, "No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!" In response, Musk wrote, "I am literally saying CUT IT ALL. Now." xAI's Ambitious Plans XaI continues its successful journey since its launch in March 2023, rapidly becoming one of the most valuable AI startups in the world. Elon Musk's acquisition of X has further bolstered the growth of the AI platform, with the data-rich platform to train and test its AI models. CoinGape earlier reported that Elon Musk's xAi joined hands with Pavel Durov's Telegram to bring Grok AI to the messenger users. In addition to this $10 billion funding, Elon Musk's AI platform is reportedly in talks to secure $20 billion in equity funding. If successful, this funding could value the company at over $120 billion, with some investors estimating its worth could reach as high as $200 billion. This significant funding will likely fuel xAI's ambitions to scale aggressively, develop more sophisticated AI models like Grok, and expand its infrastructure, positioning it among prominent private AI startups rivaling companies like OpenAI and Anthropic. It also highlights the increasing investor interest in foundation model players.

Elon Musk's xAI raises $10B in debt and equity as it faces off...

Elon Musk's xAI has raised a combined $10 billion in debt and equity, Morgan Stanley said Monday. The sum consists of $5 billion through secured notes and term loans, and the other half comes from a strategic equity investment, the bank said in a post on X, Musk's social media platform formerly known as Twitter. "This transaction, which was oversubscribed and included prominent global debt investors, reflects confidence in xAI's vision," Morgan Stanley said in a statement. It will "support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data center[s] and its flagship Grok platform." XAI did not immediately respond to The Post's request for comment. The funding will help Musk compete with rivals, like arch-nemesis OpenAI and its CEO Sam Altman, as firms scramble to build power-hungry data centers that can support language learning models. Musk's xAI has already installed 200,000 graphics processing units (GPUs) at its Colossus facility in Memphis, Tennessee, the world's richest person said in May. At the time, Musk said he plans to continue buying chips from Nvidia and AMD, and that xAI is looking to build a separate 1-million-GPU center near Memphis. The company unveiled its latest chatbot, Grok 3, in February. Though the AI bot is available on other platforms, Musk has woven the bot into X as well in an attempt to boost its userbase. His AI firm acquired X in March in a deal that valued the social media site at $33 billion - less than the $44 billion Musk paid for Twitter in 2022 - and xAI at $80 billion, though this latest funding could have changed that valuation. Last year, xAI raised $6 billion at a valuation of $50 billion, according to CNBC. Meanwhile, OpenAI recently closed a $40 billion round that valued the ChatGPT maker at $300 billion, while an Anthropic fundraising round raised the company's valuation to $61.5 billion. Musk has tried to paint Grok as a "woke" chatbot to stand out from the crowd, but that hasn't come without its fair share of controversy. The bot in May sparked confusion when it responded to unrelated user queries with bizarre mentions of "white genocide" in South Africa, telling users it "appears I was instructed to address" it. And xAI has been in fierce competition with OpenAI, which Musk co-founded with Altman in 2015 before cutting ties with the firm in 2018. Musk has claimed that OpenAI has branched away from its original mission to act as a nonprofit to focus on profit. He made an unsolicited $97.4 billion bid for OpenAI earlier this year, which Altman quickly rejected with a jab at Musk: "I feel for the guy. I don't think he's a happy person."

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)