Elon Musk has launched a new round of funding for his artificial intelligence startup xAI. After stepping back from active politics, he is offering $5 billion in attractively-interested bonds to accelerate the development of his AI initiatives.
Elon Musk has launched a new round of funding for his artificial intelligence startup xAI. After stepping back from active politics, he is offering $5 billion in attractively-interested bonds to accelerate the development of his AI initiatives.
According to Bloomberg, xAI is raising $5 billion through high-yield bonds. Morgan Stanley is coordinating the sale of the debt securities, which include fixed- and floating-rate term loans and senior secured notes. According to preliminary data, investors are offered a yield of up to 12% on the bonds and +7% to the base rate on the loans. Applications for more than $3.5 billion have already been submitted.
The money will go toward expanding the giant Colossus data center in Memphis, which already has more than 200,000 GPUs running to train neural networks. Musk plans to deploy another 1 million GPUs at a nearby campus, he told CNBC in an interview. He calls AI his No. 1 priority and plans to aggressively expand the infrastructure.
In parallel, Elon sold $300 million in xAI shares through the secondary market and raised $650 million for his other startup, Neuralink. All of this is part of a major funding campaign that Musk launched after announcing the end of his involvement in politics, including as an advisor to Donald Trump.
xAI recently merged with social network X to form XAI Holdings. This allows Musk to integrate user data, AI models, and infrastructure into a single ecosystem. He is also rumored to be in talks for an additional $20 billion in funding. Morgan Stanley has been an active supporter of Musk since 2022, including through the $44 billion deal to buy Twitter. Now, with the new debt, Musk is returning to the center of the technology race, betting on artificial intelligence.
We previously wrote that the founder and CEO of the Telegram messenger, Pavel Durov, said that xAI is investing $300 million to integrate its technologies into his service. Telegram also plans to raise $1.5 billion through a bond issue.
