Elon Musk’s xAI secures $10B in debt and equity funding

Elon Musk’s artificial intelligence venture, xAI, has raised $10 billion in a mix of debt and equity financing, according to a statement released by Morgan Stanley on Tuesday.

The financial services firm confirmed that firm has secured $5 billion through debt and an additional $5 billion through a strategic equity transaction. 

“Morgan Stanley is pleased to announce the successful completion of a $5 billion financing of Secured Notes and Term Loans for xAI, a leading innovator in artificial intelligence technology. This transaction, which was oversubscribed and included prominent global debt investors, reflects confidence in xAI’s vision to accelerate scientific discovery and advance humanity's collective understanding of the universe,” it said in a statement. 

The fresh capital will be primarily used to fuel the platform’s AI development efforts, including its large-scale data centre projects and Grok, its flagship AI platform.

This latest round follows xAI’s $6 billion raise in December, which saw participation from major investors such as Andreessen Horowitz (a16z), BlackRock, Fidelity, Lightspeed, MGX, Morgan Stanley, OIA, Sequoia Capital, NVIDIA, and AMD, among others. 

xAI’s fundraising comes amid growing competition and major capital inflows into the AI sector. In March, rival OpenAI closed a $40 billion financing round that valued the company at $300 billion, led by major investors including Microsoft and SoftBank. 

Similarly, Anthropic raised $3.5 billion at a $61.5 billion post-money valuation by Lightspeed Venture Partners, with participation from Bessemer Venture Partners, Cisco Investments, D1 Capital Partners, and Fidelity Management & Research Company, among others.