Key Points
- Elon Musk’s AI startup, xAI, has secured a total of $10 billion in new funding.
- The funding is split between $5 billion in debt and a separate $5 billion equity investment.
- The money will be used to build data centers and further develop the company’s AI model, Grok, to compete in the AI race.
- The debt deal was reportedly oversubscribed, showing strong demand from major global investors.
Elon Musk’s artificial intelligence startup, xAI, has just secured a massive $10 billion in new funding. The company completed a $5 billion debt deal and, in addition, secured a separate $5 billion strategic equity investment, according to Morgan Stanley, the bank that led the deal.
The new cash infusion will help xAI expand its AI infrastructure, especially by building out new data centers. The company is racing to compete in the incredibly hot AI industry against giants like OpenAI and Google. The money will go toward the continued development of its AI products, including its flagship chatbot, Grok.
The debt deal, which includes loans and secured notes, was reportedly oversubscribed, meaning there was more demand from investors than the available amount. This comes after earlier reports suggested that investor interest was lukewarm, so the final result is a significant win for xAI.
This $10 billion fundraising is just one part of xAI’s ambitious financial plans. The company has also been in talks to raise another $20 billion in equity, a move that could value the company at an eye-watering $120 billion or more.
The successful fundraising shows that, despite any earlier hesitation, there remains a massive appetite among investors for anything related to Elon Musk and the booming AI sector.
