Morgan Stanley said on Monday that Elon Musk’s xAI has completed a $5 billion debt raise alongside a separate $5 billion strategic equity investment.
This is as the startup looks to expand its AI infrastructure through data centres amid intensifying competition in the industry.
The proceeds will support xAI’s continued development of AI solutions, a data centre 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.
READ ALSO: NELFUND Warns Students Against Fake Online Loan Portal
According to Reuters, 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 request for comment outside regular business hours.
