Team Startupcity

• xAI secures $10 billion in funding $5 billion in debt and $5 billion in equity to expand AI infrastructure.
• Funding led by Morgan Stanley, with strong investor interest despite broader market caution.
• Proceeds to support data centers, AI development, and xAI’s flagship platform, Grok.

Elon Musk's artificial intelligence venture, xAI, has raised a total of $10 billion through a combination of debt and equity financing, according to a statement from Morgan Stanley. The funds are aimed at accelerating the company’s expansion in AI infrastructure, including the development of advanced data centers and its flagship AI chatbot platform, Grok.

The funding includes $5 billion raised via secured notes and term loans, which were reportedly oversubscribed with participation from top global debt investors. Alongside the debt financing, xAI also secured a separate $5 billion strategic equity investment, further solidifying its financial foundation in the highly competitive AI landscape.

Morgan Stanley, which led the debt raise, confirmed the deal via a post on social media platform X (formerly Twitter). This comes amid heightened investor interest in AI startups despite recent market caution.

While xAI did not respond to media requests, sources suggest the company is also in talks to raise an additional $20 billion in equity. If successful, this could push its valuation above $120 billion, with some investors estimating it as high as $200 billion.

The capital raised will support xAI’s continued advancement in AI technology and infrastructure as it positions itself against major players in the AI race.