According to media reports, Elon Musk’s xAI is initiating a $3 billion stock sale plan, which will allow employees to sell shares to new investors. This transaction values the company at $113 billion, consistent with the price at which Musk’s xAI acquired its social media platform X in March. Musk has also launched a $5 billion debt sale for xAI. Additionally, Musk’s brain-computer interface company Neuralink has raised $650 million in funding. Since Musk’s return to his business empire and shift away from politics, his companies have rapidly initiated a series of financing activities, including xAI’s $3 billion stock sale and $5 billion debt offering. Furthermore, Neuralink secured $650 million in its Series E funding round.
On Monday, media reports indicated that Musk’s xAI is launching a $3 billion stock sale, enabling employees to sell shares to new investors. The company’s valuation in this transaction reaches $113 billion, aligning with the valuation from xAI’s acquisition of social media platform X in March. Musk merged xAI with his social platform X this year to form a new entity named XAI Holdings. The March acquisition valued the entire group at $113 billion, with xAI valued at $80 billion and X at $33 billion. Musk acquired X (formerly Twitter) for $44 billion in October 2022. Industry insiders note that this secondary stock sale, referred to as a “tender offer,” is expected to be followed by a larger funding round where the company will issue new shares to external investors. In April, media reported that XAI was in discussions with investors to raise approximately $20 billion for its newly merged AI startup and social media business, highlighting market enthusiasm for AI and Musk’s influence. Additionally, Musk has initiated a $5 billion debt sale for xAI. Media reports state that Morgan Stanley is seeking debt financing for xAI, which may help Musk continue significant investments in AI infrastructure, particularly the construction of a large data center named Colossus in Memphis. Sources familiar with the matter indicate that the debt financing package includes Class B term loans, fixed-rate term loans, and senior secured notes. The funds will be used for general corporate purposes, with commitment letters set to expire on June 17.xAI declined to comment on the above news. Regarding the merger of xAI and X into a single company, Musk previously stated that this integration would enable synergies by combining models, computing power, distribution channels, and talent. For example, AI developers could better leverage data from the social media platform to train their models and reach its user base. Musk did not disclose further details on the specific structure of the xAI and X merger deal in March.
Some analysts suggest that this opaque transaction allows X to capitalize on xAI’s rising valuation for support. Musk founded xAI in 2023 to challenge Sam Altman’s OpenAI and other major tech companies. The AI startup achieved a valuation of $45 billion in a $500 million private funding round late last year. Musk also granted xAI 25% ownership to investors who supported his acquisition of Twitter last year. xAI quickly launched the Grok chatbot and built the Colossus supercomputer cluster, one of the largest AI data center projects in the U.S. Beyond competing with big tech and Grok’s sometimes “rugged” image, Musk has secured several partnerships. Last month, Microsoft announced it would offer xAI models to its cloud computing customers, and the messaging app Telegram agreed to distribute Grok to its one billion users. Musk previously revealed on May 20 that his Memphis data center had deployed 200,000 GPUs for training AI systems, with plans to add one million more GPUs at a nearby location. Neuralink Raises $650 Million: Media reports indicate that Musk has raised $650 million for his brain-computer interface company Neuralink, valuing it at $9 billion, excluding this new investment. Neuralink’s valuation in the previous funding round was $3.5 billion, which occurred in 2023. Musk Returns from DOGE to Business Empire: Musk spent several months serving as a senior advisor to Trump, frequently accompanying him to events and providing strong support for Trump’s 2024 presidential campaign as a major donor. Musk’s role at the U.S. Department of Government Efficiency (DOGE) ended last week. During his tenure, he introduced large-scale government spending cuts, which sparked widespread criticism and raised concerns about his companies’ performance.This series of financing activities occurred after Musk stepped down from his role in the Trump administration, where he was responsible for cutting administrative costs. Analysis suggests that Musk appears eager to refocus on his various business ventures. Since Trump’s inauguration, the stock price of Tesla, where Musk serves as CEO, has fallen by 20%. Musk previously stated that he would re-concentrate on his business empire after his companies were affected by their association with President Trump. At the end of last month, Musk wrote on X: Returning to 24-hour work mode, spending nights in the conference room/server room/factory. I must fully focus on X/xAI and Tesla, as we are in a critical phase of key technology releases.
Risk Warning and Disclaimer: The market involves risks, and investment requires caution. This article does not constitute personal investment advice and has not considered individual users’ specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their particular circumstances. Investments made based on this are at the investor’s own risk.
