Musk's xAI completes $10 billion financing, with a valuation of $113 billion

Elon Musk's artificial intelligence company xAI has been revealed to have completed a new round of financing totaling $10 billion, including $5 billion in debt financing and $5 billion in equity financing. Morgan Stanley served as debt advisor for the transaction, but the specific list of debt and equity investors has not yet been made public.

People familiar with the matter revealed that the debt portion of this time consists of three types of financing instruments:

A $3 billion bond with a yield of 12.5%;

A $1 billion fixed-rate term loan with the same interest rate of 12.5%;

Another $1 billion term loan with an interest rate of 7.25 percentage points above the benchmark rate and a discount of 96 cents per dollar.

These funds will be used to accelerate the construction of xAI's computing infrastructure, strengthen its ChatGPT-like large language model product Grok, and further integrate Musk's social media platform X in the ecosystem. Previously, xAI had completed $6 billion in financing in December 2023, with investors including Andreessen Horowitz, BlackRock, Lightspeed Venture Partners and MGX. After the financing was completed, xAI completed the acquisition of X in an all-stock manner, and the combined company was valued at $113 billion.

xAI is an emerging AI company founded by Musk in 2023, aiming to build a general artificial intelligence platform to compete with OpenAI and Anthropic. Unlike other companies, xAI closely integrates the deployment of AI with Musk's social platform, autonomous driving and robotics projects to form unique data resources and product channels.

This $10 billion financing also marks the further warming of the AI capital market, especially in the context of a new round of competition among global technology giants around computing power and basic models. The rapid expansion of xAI is seen as an important part of Musk's promotion of the "full-stack AI strategy."