Elon Musk’s artificial intelligence venture xAI is seeking a staggering $113 billion valuation in a share sale worth $300 million, according to reports on Monday.
The development underscores the breakneck pace at which xAI is growing, just two years since its founding, and comes amid a flurry of financial engineering designed to consolidate its role in the AI-social media space.
According to Bloomberg, Morgan Stanley has launched a $5 billion debt package to support xAI, including a term loan B, a fixed-rate term loan, and senior secured notes. The proceeds will reportedly be used for “general corporate purposes.”
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Commitments for the debt sale are due by June 17.
The Financial Times earlier reported that the $300 million share sale will allow employees to sell their shares to investors, with a larger investment round expected to follow. In that subsequent round, xAI plans to issue new equity to outside investors, possibly marking a major infusion of fresh capital for the company.
A Blurred Line Between xAI and X
The latest capital moves come just months after Musk formally merged his social media platform X (formerly Twitter) into xAI. The March acquisition valued xAI at $80 billion and the X platform at $33 billion, according to Musk. The combined business model integrates social media with generative AI, potentially giving xAI a significant user base to feed and test its AI models in real time across one of the most politically active and controversial digital platforms in the world.
The merger also drew attention to Musk’s broader ambition to build a vertically integrated tech ecosystem — one that touches AI, media, cloud infrastructure, autonomous vehicles, and energy — all with Musk-linked entities at the center.
The financing push also follows Musk’s departure from a high-profile role in President Donald Trump’s administration, where he led the Department of Government Efficiency (DOGE). The campaign, aimed at reducing federal spending, ended in a chaotic four-month stretch that drew both praise and criticism.
Musk resigned earlier this month but is expected to remain a close adviser to Trump, who has increasingly aligned himself with high-growth tech entrepreneurs in a bid to frame his administration as pro-innovation.
During Tesla’s earnings call in April, Musk said he would refocus on the electric vehicle company, though he continues to juggle his involvement with SpaceX, Neuralink, The Boring Company, X, and xAI. The AI startup, in particular, is now at the forefront of Musk’s vision for a future dominated by artificial general intelligence and user-driven algorithmic platforms.
Reports from April had indicated that xAI was in early-stage talks with investors to raise as much as $20 billion to support its expansion, including potential investments in GPU infrastructure, data centers, and content moderation systems for X. With the new debt deal and upcoming equity sale, the firm appears to be accelerating those plans.
The combined valuation of $113 billion, if achieved, would place xAI among the top-valued AI companies globally, rivaling even OpenAI and Anthropic. Unlike its peers, xAI has the added advantage of a built-in social platform for real-time deployment and feedback — an integration Musk has said will be central to training more “truthful” and censorship-resistant AI models.
Growing Market Appetite for AI and Musk-Branded Ventures
The upsized valuation drive reflects both growing investor appetite for artificial intelligence and continued market confidence in Musk-led ventures, despite growing concerns over leverage and governance. Musk’s ability to raise massive rounds — whether through debt, equity, or convertible instruments — has remained largely intact due to his tech and business acumen and the cult-like following surrounding his companies.
Morgan Stanley’s involvement is another signal that Wall Street is again warming to high-stakes, high-valuation bets, especially under a Trump administration that is promising a more favorable climate for AI development and reduced regulatory headwinds for controversial social platforms like X.
If successful, the current funding round and debt raise would make xAI not only one of the fastest-growing startups in history but also a cornerstone of Musk’s broader ambition to reshape everything from public discourse to digital cognition.
With Elon Musk’s controversial time in Washington, D.C., having officially come to a close, two of his fledgling companies are shoring up their financial standing: Musk’s neurotech startup, Neuralink, announced a $650 million Series E funding round on Monday. Meanwhile, Musk’s xAI artificial intelligence venture is looking to generate fresh capital via a $300 million secondary stock offering, per the Financial Times, citing anonymous sources. An anonymously-sourced Bloomberg report notes xAI is also weighing selling $5 billion in debt.