Musk's xAI Raises $5 Billion; Deal Oversubscribed, Says Morgan Stanley

Morgan Stanley announced the successful completion of a $5 billion financing of Secured Notes and Term Loans for Elon Musk's xAI, via their X post. xAI is a leading innovator in artificial intelligence technology. The deal was oversubscribed and included prominent global debt investors, it added.

"The combination of debt and equity reduces the overall cost of capital and substantially expands pools of capital available to xAI," stated the post.

The proceeds are set to support xAI's development of AI solutions, a data centre and the Grok platform, according to the bank.

Morgan Stanley is proud to partner with xAI in this milestone transaction, which underscores our commitment to support pioneering companies shaping the future of technology, said the company.

There were earlier Bloomberg reports around xAI's talks to raise $4.3 billion through an equity investment on top of the $5 billion.

Musk’s company, which is responsible for the AI chatbot Grok, needs the additional funds, in part, because it has already spent most of what it previously raised, according to the report.