The company, which developed the AI chatbot Grok, requires the new funds partly because it has nearly exhausted its previous capital, according to the materials provided to investors.
Since its inception in 2023 and up until the launch of the debt offering this year, xAI has raised $14 billion through equity financing. However, as of March 31, only $4 billion remained on the company’s balance sheet, the information indicated.
Commitments for the $5 billion debt offering are due Tuesday, as noted by another source familiar with the situation. Along with the new funding, xAI could also receive a $650 million rebate from one of its manufacturers, which would assist in reducing costs, according to informed individuals.
A spokesperson for the company and a representative for Morgan Stanley, the bank overseeing xAI’s debt offering, both declined to comment.
Significant fundraising rounds have become common in the competitive artificial intelligence sector, where leading firms are racing to secure expensive computer chips and the infrastructure required to train advanced AI models, such as Grok and ChatGPT.
Despite the substantial expenditures, potential investors have been informed that xAI’s valuation reached $80 billion by the end of the first quarter, increasing from $51 billion at the close of 2024. Previous investors include Andreessen Horowitz, Sequoia, and VY Capital.
Musk has recently chosen to integrate xAI with his social media platform X, but the new funds will be allocated for AI projects.
