Elon Musk's xAI is now eyeing a valuation of $113B
What's the story
Elon Musk's artificial intelligence (AI) venture, xAI, is seeking a whopping $113 billion valuation in a new stock sale.
The company is also raising $5 billion in debt with the help of Morgan Stanley.
The debt instruments on offer comprise a floating-rate term loan, a fixed-rate term loan, and senior secured notes.
Financials
High borrowing costs and debt sale commitments
The early pricing discussions for the debt instruments indicate high borrowing costs, with interest rates as high as 12% on senior notes.
The commitments for this debt sale are due by June 17.
The money raised from this will be used for "general corporate purposes," sources told Bloomberg, and is expected to back Musk's heavy spending on AI infrastructure, such as a massive data center in Memphis, US.
Strategy
xAI's upcoming share sale and fundraising plans
Along with the debt raise, Musk's AI start-up is also gearing up for a $300 million share sale. This would give employees an opportunity to sell their stocks.
A bigger fundraising round is likely to follow this secondary stock offer, where xAI will issue new equity to outside investors.
These moves are part of Musk's broader strategy for his various ventures, including Neuralink.
Business expansion
xAI's acquisition of X
Founded in March 2023, xAI made headlines earlier in 2025 when it acquired X, Musk's social media platform formerly known as Twitter.
The deal valued xAI at $80 billion and X at $33 billion.
Despite being a relatively new player in the market, xAI was already in conversations with investors to raise around $20 billion in funding for its combined AI start-up and social media business.