Days after exit from politics, Elon Musk taps investors for $5 billion debt funding for xAI, $650 million for Neuralink

Days after declaring his exit from the Donald Trump administration and as head of the Department of Government Efficiency (DOGE), billionaire Elon Musk has redirected his attention to securing funding for his ventures, as reported by Bloomberg.

According to sources, Elon Musk is offering $5 billion in debt for his AI firm xAI Corp, with Morgan Stanley serving as the banker, at a double-digit interest rate. The decision probably arises as the AI startup seeks to finance its extensive infrastructure through a large data center in Memphis, Tennessee.

The report stated that a xAI spokesperson refused to comment, whereas the Morgan Stanley representative did not respond promptly to inquiries.

Elon Musk’s $5 billion financing deal for xAI — Information

The report referencing sources states that the $5 billion debt arrangement consists of a floating-rate term loan, a fixed-rate term loan, and senior secured notes. The funds collected will be allocated for general company purposes, it mentioned, noting that obligations are due on June 17.

Initial pricing talks indicate a 7 percentage point increase above the benchmark rate for the floating-rate term loan and an approximate 12 percent yield on the senior notes, according to other sources cited by the publication. They commented that the debt issuance has already produced more than $3.5 billion.

In a different report, Bloomberg indicated that Elon Musk’s Neuralink secured an extra $650 million. The Financial Times (FT) reported that this involved divesting $300 million in xAI stock via a secondary offering.