Musk taps investors for billions days after Washington exit

Elon Musk is selling $5 billion in debt for his artificial intelligence startup, xAI, with Morgan Stanley shopping the debt at a double-digit interest rate, according to news agency Bloomberg.

The debt package reportedly includes a floating-rate term loan, a fixed-rate term loan, and senior secured notes. The funds will be used for general corporate purposes, with commitments due by June17.

This marks the latest in a string of fundraising efforts across Musk’s business empire, as he shifts focus back to running his companies and away from political activity. The move comes shortly after Reuters reported that xAI is aiming for a $113 billion valuation in a $300 million share sale.

The financing could support Musk’s plans to scale up AI infrastructure, including expansion of xAI’s Colossus supercomputer and the development of a data centre in Memphis, purchased in March.

Early pricing discussions suggest a rate of 7 percentage points above the benchmark for the floating-rate loan and around a 12% yield on the senior notes. The debt package has already seen strong investor demand, exceeding $3.5 billion.

The debt is linked to XAI Holdings, which includes both xAI and Musk’s social media platform X, merged in March via an all-stock deal valued at $33 billion. In April, Bloomberg reported that XAI Holdings was in talks to raise around $20 billion from investors.

Meanwhile, on Tuesday, ET reported that Musk’s brain implant company Neuralink has raised $650 million in a funding round, with ARK Invest, Lightspeed, QIA, and Sequoia Capital, among others, participating.

"With this funding, we accelerate our path to bringing life-changing capabilities to more people, and continue pushing the boundaries of what’s possible with brain-computer interfaces," the company said in an X post.