Morgan Stanley opens xAI books with Musk in Trump crosshairs
Even before
Elon Musk
and President
Donald Trump
's public falling out, selling debt for the tech mogul's companies has always been tricky for
Morgan Stanley
. But
xAI
Corp. was supposed to be different.
Beyond the frenzy around artificial intelligence in markets of late, internal numbers, which the bank revealed to a select group of investors Thursday, show a company that anticipates generating more than $13 billion of annual earnings by 2029, according to a person with knowledge of the figures.
Yet the Musk-Trump feud, which has exploded into public view and degenerated into an ugly tit-for-tat for all to see, will now almost certainly make the bankers' task more complicated. Trump, as he's proven with Harvard and Columbia Universities, is willing to use unconventional tactics to punish those who challenge him, and all companies in Musk's empire, including xAI, could wind up in the crosshairs.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Una abuela sigue cayéndose de su silla de ruedas - Su hijo pone cámaras y ve la verdad
Plays Star
Undo
It wasn't immediately clear how the debt sale effort had been affected by the clash. The price of a loan for social-media-platform X, another of Musk's companies that is attached to xAI in a broader enterprise, was down roughly 1.25 points on Thursday, as their arguments became more ferocious online.
By late Thursday, Musk signaled he would move to cool tensions with Trump, while White House aides ahd scheduled a call between the two to avoid further escalation, Politico reported.
Live Events
A representative for Morgan Stanley declined to comment, while xAI didn't respond to a request for comment made after normal business hours.
Discover the stories of your interest
Blockchain
5 Stories
Cyber-safety
7 Stories
Fintech
9 Stories
E-comm
9 Stories
ML
8 Stories
Edtech
6 Stories
In meetings Thursday, investors who were willing to write checks of at least $50 million were allowed to view limited statistics about xAI, including revenue, earnings, cash flow and projections, said multiple people with knowledge of the situation, who asked not to be identified because they were not authorized to speak publicly.
The figures showed xAI losing money and burning cash, which is typical for a startup in the AI industry.
The company had $52 million in gross revenue during the first quarter and lost $341 million before interest, taxes, depreciation and amortization, according to material shared with investors. The company projects that figure — known as Ebitda in Wall Street parlance — will be $2.7 billion in 2027 and $13.1 billion in 2029, one of the people said.
xAI anticipates $1 billion in gross revenue by the end of this year, which it predicts will grow to $14 billion by 2029, the person added.
Its cash flow from operations was negative $220 million after spending $2.6 billion on capital expenditures, that person added. The company plans to spend $18 billion on investments in data centers going forward.
The figures were not audited nor were they subject to the same accounting standards publicly traded companies follow, the people said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
35 minutes ago
- Hindustan Times
Kilmar Abrego Garcia returned to the US, charged with transporting people in the country illegally
WASHINGTON — Kilmar Abrego Garcia, whose mistaken deportation to El Salvador became a political flashpoint in the Trump administration's stepped-up immigration enforcement, was returned to the United States on Friday to face criminal charges related to what the Trump administration said was a massive human smuggling operation that brought immigrants into the country illegally. His abrupt release from El Salvador closes one chapter and opens another in a saga that yielded a remarkable, months-long standoff between Trump officials and the courts over a deportation that officials initially acknowledged was done in error but then continued to stand behind in apparent defiance of orders by judges to facilitate his return to the U.S. The development occurred after U.S. officials presented El Salvador President Nayib Bukele with an arrest warrant for federal charges in Tennessee accusing Abrego Garcia of playing a key role in smuggling immigrants into the country for money. He is expected to be prosecuted in the U.S. and, if convicted, will be returned to his home country of El Salvador at the conclusion of the case, officials said Friday. 'This is what American justice looks like,' Attorney General Pam Bondi said in announcing Abrego Garcia's return and the unsealing of a grand jury indictment. A court appearance in Nashville was set for Friday. Democrats and immigrant rights group had pressed for Abrego Garcia's release, with several lawmakers — including Sen. Chris Van Hollen of Maryland, where Abrego Garcia had lived for years — even traveling to El Salvador to visit him. A federal judge had ordered him to be returned in April and the Supreme Court rejected an emergency appeal by directing the government to work to bring him back. But the news that Abrego Garcia, who had an immigration court order preventing his deportation to his native country over fears he would face persecution from local gangs, was being brought back for the purpose of prosecution was greeted with dismay by his lawyers. 'The government disappeared Kilmar to a foreign prison in violation of a court order. Now, after months of delay and secrecy, they're bringing him back, not to correct their error but to prosecute him. This shows that they were playing games with the court all along,' said one of his lawyers, Simon Sandoval-Moshenberg. The indictment, filed last month and unsealed Friday, lays out a string of allegations that date back to 2016 but are only being disclosed now, nearly three months after Abrego Garcia was mistakenly deported and following the Trump administration's repeated claims that he is a criminal. It accuses him of smuggling throughout the U.S. thousands of people living in the country illegally, including members of the violent MS-13 gang, from Central America and abusing women he was transporting. A co-conspirator also alleged that he participated in the killing of a gang member's mother in El Salvador, prosecutors wrote in papers urging the judge to keep him behind bars while he awaits trial. The indictment does not charge him in connection with that allegation. 'Later, as part of his immigration proceedings in the United States, the defendant claimed he could not return to El Salvador because he was in fear of retribution from the 18th Street gang,' the detention memo states. 'While partially true — the defendant, according to the information received by the Government, was in fear of retaliation by the 18th Street gang — the underlying reason for the retaliation was the defendant's own actions in participating in the murder of a rival 18th Street gang member's mother," prosecutors wrote. The charges stem from a 2022 vehicle stop in which the Tennessee Highway Patrol suspected him of human trafficking. A report released by the Department of Homeland Security in April states that none of the people in the vehicle had luggage, while they listed the same address as Abrego Garcia. Abrego Garcia was never charged with a crime, while the officers allowed him to drive on with only a warning about an expired driver's license, according to the DHS report. The report said he was traveling from Texas to Maryland, via Missouri, to bring in people to perform construction work. In response to the report's release in April, Abrego Garcia's wife said in a statement that he sometimes transported groups of workers between job sites, 'so it's entirely plausible he would have been pulled over while driving with others in the vehicle. He was not charged with any crime or cited for any wrongdoing.' Abrego Garcia's background and personal life have been a source of dispute and contested facts. Immigrant rights advocates have cast his arrest as emblematic of an administration whose deportation policy is haphazard and error-prone, while Trump officials have pointed to prior interactions with police and described him as a gang member who fits the mold they are determined to expel from the country. Abrego Garcia lived in the U.S. for roughly 14 years, during which he worked construction, got married and was raising three children with disabilities, according to court records. Trump administration officials said he was deported based on a 2019 accusation from Maryland police that he was an MS-13 gang member. Abrego Garcia denied the allegation and was never charged with a crime, his attorneys said. A U.S. immigration judge subsequently shielded Abrego Garcia from deportation to El Salvador because he likely faced persecution there by local gangs. The Trump administration deported him there in March, later describing the mistake as 'an administrative error' but insisting he was in MS-13. Abrego Garcia's return comes days after the Trump administration complied with a court order to return a Guatemalan man deported to Mexico despite his fears of being harmed there. The man, identified in court papers as O.C.G, was the first person known to have been returned to U.S. custody after deportation since the start of President Donald Trump's second term.
Hindustan Times
42 minutes ago
- Hindustan Times
US Supreme Court allows DOGE access to Social Security data
The US Supreme Court on Friday allowed the Department of Government Efficiency, billionaire Elon Musk's former department, broad access to the Social Security Administration's data systems. This will allow the DOGE to access personal information of millions of Americans logged under the SSA, news agency Reuters reported. Justices put on hold the order of Maryland-based US District Judge Ellen Hollander, who had largely blocked DOGE's access to "personally identifiable information" in data such as medical and financial records while litigation proceeded in a lower court. This move came at the Justice Department's request. The court, which had a 6-3 conservative majority, did not provide a rationale for siding with the DOGE. Two labor unions and an advocacy group sued to stop DOGE from accessing sensitive data at the SSA. The plaintiffs of the lawsuit argued that SSA had been "ransacked" and that DOGE members had been installed at the agency without proper vetting or training and demanded access to some of its sensitive data systems. Earlier in February, DOGE's move to seek access to SSA data prompted the acting commissioner, Michelle King, to step down against the backdrop of the Musk-security system issues. King chose to resign after over 30 years of service as she refused to provide the requested information to the DOGE staffers at the SSA. A day later, the White House had said that the Trump administration put an "anti-fraud expert" temporarily in charge at the SSA. At the time, Trump also directed Musk and DOGE to identify fraud at the agency, with White House press secretary Karoline Leavitt saying that several dead people have been receiving fraudulent Social Security payments. "They haven't dug into the books yet, but they suspect that there are tens of millions of deceased people who are receiving fraudulent Social Security payments and so their goal in going into the Social Security Administration is to identify three things: Number one, to identify duplicate payments and to end them, Number two, to identify payments that are going to deceased people who are no longer living and should no longer be receiving that money and number three, to protect the integrity of the system for hardworking Americans who have been paying into it their entire lives,' Leavitt had told Fox News. Nancy Altman, president of the Social Security Works, an advocacy group for the preservation of Social Security benefits, said that there is no way to overstate "how serious a breach this (DOGE seeks SSA data) is". "And my understanding is that it has already occurred. The information collected and held securely by the Social Security Administration is highly sensitive," she had added. SSA has the data of everyone with a Social Security number, Medicare, and every low-income American who has applied for Social Security's means-tested companion program, Supplemental Security Income. In addition, Social Security payments account for around $1.5 trillion, or a fifth, of the annual federal spending in the US. An audit from last year, a NYT report cited. The agency is a major provider of government benefits, sending checks each month to more than 70 million recipients including retirees and disabled Americans.
Time of India
43 minutes ago
- Time of India
Frivolous applications: RPSC filed criminal cases against 14 candidates
1 2 Ajmer: The Rajasthan Public Service Commission (RPSC) Friday said that it has filed a criminal complaint against 14 candidates between Nov 2024 and Jan 2025 for filing frivolous applications for the post of assistant professor in Sanskrit college education exam. The commission filed the complaints at the additional chief magistrate of Ajmer under Section 217 of Bharatiya Nyaya Sanhita (BNS). Jaswant Garasiya of Banswara is a Bachelor of Arts (BA), but he filed an application for the assistant director (Science and IT department) exam 2024, even though the essential qualification for this exam was a first-class degree in natural and agricultural science or a first-class Master's degree in engineering or technology, or a first-class MSc or MTech with a graduate degree in science and engineering, along with two years of specialised experience in IT and science technology organisation. Garasiya also filed an application for assistant testing officer and junior chemist exam of the RPSC. RPSC secretary Ramniwas Mehta said, "I spoke to the candidate on phone regarding the filing of the application, and he admitted that he is a BA pass, but he could not answer why he filed such applications." RPSC warned such candidates that if it is found that the candidate filed an application without the essential qualification and experience, then he will be barred from other exams. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 보증금 없는 신차장기렌트, 2년 타보고 결정하세요 전국최저가렌트리스센터 더 알아보기 Undo of the commission. The IT department prepared a special software with AI to detect such applications that do not have the essential qualification or experience. Mehta said, "Therefore, we have given a chance to such candidates to withdraw their applications by June 9 in 10 different types of exams which RPSC is going to conduct." Mehta said, "Another candidate I spoke to was Khalendra Prasad of Sambhar Lake of Jaipur, who is a Bachelor of Engineering and filed an application for assistant testing officer for which the essential qualification was MSc in geology or MSc in chemistry with two years of experience in testing of soil aggregates." Mehta said that the RPSC also warned that if a candidate provides forged documents or wrong information about the essential qualification or experience, then an FIR will be filed against him as RPSC has already filed FIRs in such matters. Get the latest lifestyle updates on Times of India, along with Eid wishes , messages , and quotes !
