Quick overview

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Elon Musk’s xAI is targeting a valuation of up to $200 billion in its next funding round. This comes after the company’s successful acquisition of $50 billion in debt financing and an additional $50 billion through strategic equity investments.

The debt financing includes term loans and secured notes. xAI is currently in discussions to raise about $200 billion, which could boost its valuation to between $120 billion and $200 billion once the round concludes. Investors’ interest remains high, especially in the secured debt component, which has seen an overwhelming response.

This funding round follows xAI’s previous raise of $60 billion in December 2024. The total amount raised to date nears $170 billion, reflecting strong investor confidence in Musk’s latest venture. Notable investors include Kingdom Holding Co., Vy Capital, and Valor Equity Partners, among others. Valor Equity Partners, known for supporting Musk’s initiatives, was a key contributor.

The hybrid approach of combining debt and equity aims to reduce overall capital costs and expand access to diverse funding sources. According to Morgan Stanley, which advised on the debt portion, the offering was oversubscribed, signaling robust market confidence in xAI’s potential to advance AI development and enhance human understanding of the universe.