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xAI Secures $10 Billion in Debt and Equity to Scale AI Infrastructure

The oversubscribed financing fuels xAI’s ramp-up of Grok AI infrastructure in US data centers.

A 3D-printed miniature model of Elon Musk and the xAI logo are seen in this illustration taken January 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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Overview

  • xAI completed $10 billion in financing on July 1 by raising $5 billion through secured notes and term loans alongside a $5 billion strategic equity investment.
  • Morgan Stanley said the debt tranche was oversubscribed by prominent global investors, reflecting strong demand despite xAI’s near-$1 billion monthly burn rate.
  • xAI plans to channel the new funds into expanding its Grok AI platform, developing cutting-edge AI solutions, and scaling its US data center network.
  • The startup is in advanced talks to secure about $20 billion more in equity, which could push its valuation above $120 billion.
  • This funding surge positions xAI to accelerate its infrastructure build-out and intensify competition with rivals such as OpenAI.