xAI Secures Debt Backing

Elon Musk's AI venture, xAI Corp., is set to receive debt backing with TPG Angelo Gordon as a key investor. TPG Angelo Gordon is investing in a loan as part of a larger debt offering for xAI, pre-marketed by Morgan Stanley. This financial injection arrives as xAI pursues a $113 billion valuation through a $300 million share sale, allowing employees to sell shares. The capital will support general corporate purposes, notably the expansion of xAI's Colossus data centre in Memphis, planning to increase its GPU capacity to over one million.

The debt package, arranged by Morgan Stanley, includes term loans, fixed-rate notes, and senior secured notes. The senior secured notes are backed by xAI's intellectual property and personal guarantees from Musk, providing downside protection. This financial strategy aims to leverage synergies across Musk's enterprises, including X and Tesla. The debt offering, combined with the equity raise, forms a war chest to accelerate AI development across Musk's companies.

This move reflects investor confidence in Musk's capacity to integrate AI advancements across his various ventures. The debt structure is designed for stability, offering flexibility for R&D spending while providing downside protection through secured notes. This financial strategy highlights the convergence of AI, political influence, and cross-company collaboration within Musk's ecosystem.