Elon Musks xAI raises $10B in debt and equity as it faces off against Sam Altmans OpenAI

Elon Musk’s xAI has raised a combined $10 billion in debt and equity, Morgan Stanley said Monday.The sum consists of $5 billion through secured notes and term loans, and the other half comes from a strategic equity investment, the bank said in a post on X, Musk’s social media platform formerly known as Twitter.“This transaction, which was oversubscribed and included prominent global debt investors, reflects confidence in xAI’s vision,” Morgan Stanley said in a statement.It will “support xAI’s continued development of cutting-edge AI solutions, including one of the world’s largest data center[s] and its flagship Grok platform.”XAI did not immediately respond to The Post’s request for comment.The funding will help Musk compete with rivals, like arch-nemesis OpenAI and its CEO Sam Altman, as firms scramble to build power-hungry data centers that can support language learning models.Musk’s xAI has already installed 200,000 graphics processing units (GPUs) at its Colossus facility in Memphis, Tennessee, the world’s richest person said in May.At the time, Musk said he plans to continue buying chips from Nvidia and AMD, and that xAI is looking to build a separate 1-million-GPU center near Memphis.The company unveiled its latest chatbot, Grok 3, in February.Though the AI bot is available on other platforms, Musk has woven the bot into X as well in an attempt to boost its userbase. His AI firm acquired X in March in a deal that valued the social media site at $33 billion – less than the $44 billion Musk paid for Twitter in 2022 – and xAI at $80 billion, though this latest funding could have changed that valuation. Last year, xAI raised $6 billion at a valuation of $50 billion, according to CNBC.Meanwhile, OpenAI recently closed a $40 billion round that valued the ChatGPT maker at $300 billion, while an Anthropic fundraising round raised the company’s valuation to $61.5 billion.Musk has tried to paint Grok as a “woke” chatbot to stand out ...