Elon Musk raises new funds for xAI as he steps back from politics
Elon Musk is selling US$5 billion in debt for his artificial intelligence (AI) start-up, xAI, the latest in a series of fundraising efforts across his business empire as the billionaire pivots away from politics and returns to running his various companies.
Morgan Stanley is shopping the debt for xAI with a double-digit interest rate, according to people familiar with early pricing discussions. The financing could help Musk continue to spend aggressively on AI infrastructure as he builds out a massive data centre in Memphis, Tennessee.
Musk appears eager to refocus on his array of businesses after announcing last week that he would be
stepping back from politics . He had spent months as a senior adviser and regular companion to US President Donald Trump, for whom he campaigned in the 2024 election and was a top financial supporter.
The debt package included a floating-rate term loan, a fixed-rate term loan and senior secured notes, said the people, who are not authorised to share the information publicly. The proceeds will go toward general corporate purposes, with commitments due June 17.
Early pricing discussions were 7 percentage points over the benchmark rate for the floating-rate term loan and a roughly 12 per cent yield on the senior notes, different people with knowledge of the matter said. The debt sale already garnered demand in excess of US$3.5 billion, they added.
Unsold Tesla Cybertrucks sit in a car park at a shopping centre in Michigan. Shares of the carmaker are down 20 per cent since US President Donald Trump took office. via AFP
A representative for xAI declined to comment. Morgan Stanley did not immediately provide a comment.
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