Elon Musk's xAI raises a whopping $10B, including $5B debt
What's the story
Elon Musk's artificial intelligence (AI) start-up, xAI, has raised a whopping $10 billion in funding. The amount includes $5 billion in debt and another $5 billion in strategic equity investment. The funds will be used to expand xAI's infrastructure through data centers and further develop its AI solutions, including the Grok platform.
Funding details
Deal was oversubscribed, with participation from global debt investors
The debt portion of the funding consists of secured notes and term loans. As per Morgan Stanley, the deal was oversubscribed, with participation from prominent global debt investors. In addition to the debt raise, xAI has also been in talks for an equity investment. Bloomberg reported that the company was initially negotiating a $4.3 billion equity deal.
Market impact
xAI seeks to raise $20 billion in equity
xAI is also in talks to raise some $20 billion in equity. This would value the company at over $120 billion, with some investors estimating valuations as high as $200 billion. The funding comes amid increasing competition in the AI industry and will help bolster Musk's start-up's position in this rapidly evolving market.