Billionaire Elon Musk’s xAI has completed a $5B debt raise along with a separate $5B strategic equity investment, according to Morgan Stanley (NYSE:MS).
The $5B in debt consists of financing of secured notes and term loans, Morgan Stanley said in a post on X.
Morgan Stanley noted that the transaction was oversubscribed and included prominent global debt investors.
“The combination of debt and equity reduces the overall cost of capital and substantially expands pools of capital available to xAI,” said Morgan Stanley.
The proceeds will support xAI’s continued development of AI solutions, including one of the world’s largest data center and its flagship Grok platform, according to Morgan Stanley.
XAI did not immediately respond to a request for comment from Seeking Alpha.
Last month, it was reported that Morgan Stanley was reaching out to investors for a $5B debt sale for the AI company. Separately, it was also reported that xAI was seeking to raise an additional $4.3B through an equity offering.
Musk’s AI startup, reportedly, is going through $1B a month, amid an increase in costs.