Prime Highlights :
Elon Musk’s artificial intelligence company xAI has kicked off a $5 billion debt sale and seeks a $113 billion valuation.
A side $300 million share offering will enable workers to sell shares before a larger funding round.
Key Facts :
The debt deal comprises term loan B, fixed rate loans, and senior secured notes, led by Morgan Stanley.
Commitments for the debt offering are due June 17, with proceeds earmarked for general corporate purposes.
Important Background :
Elon Musk’s artificial intelligence firm xAI is going on the offensive in its financial efforts on a dual-track approach: a $5 billion debt deal and a $300 million employee stock sale. The sale of debt is handled by Morgan Stanley and comprises term loan B, fixed-term loans, and senior secured notes. The instruments are designed to appeal to large institutional investors, and commitments are required by June 17. The collected capital will be used to fund general corporate purposes as xAI develops its business in AI and machine learning.
Simultaneously, xAI has initiated a $300 million raise to allow employees to sell prior shares to external investors. The move injects liquidity into early employees and reflects optimistic expectations on the valuation path of the company. The valuation target of the company at present stands at $113 billion, and the company is likely to have a larger external raise later this year.
xAI was established by Musk in March 2023 and soon became a focal point in the AI sector. A major turning point arrived in March 2025, when xAI took over the social media site X (previously Twitter) for $45 billion. This acquisition led to the creation of X.AI Holdings Corp., with xAI bringing $80 billion in value and X representing $33 billion. The merged company is currently valued at $113 billion.
Musk’s engagement with xAI is part of his wider vision for transforming AI in technology and society. The firm has already released the Grok chatbot and deeply invested in infrastructure such as its “Colossus” supercomputer cluster. Supported by well-known investors such as Andreessen Horowitz and Sequoia Capital, xAI is fast emerging as a leading player in generative AI, in addition to utilizing Musk’s network of companies to drive adoption.
