Elon Musk's xAI sent ripples through the AI industry on June 3, 2025, by announcing it is raising $5 billion in debt financing through Morgan Stanley. This move, reported by TheTechPortal and WebProNews, is aimed at drastically bolstering its AI infrastructure, including the ambitious "Colossus" supercomputer project in Tennessee and the acquisition of hundreds of thousands of additional GPUs to complement its existing arsenal of over 200,000 units. Investors are reportedly expected to commit to the debt package (comprising term loans and senior notes) by June 17. Concurrently, a $300 million stock sale is underway, allowing employees to cash in on their shares at a rumored company valuation of $113 billion following its recent merger with X Corp (formerly Twitter). This financial surge highlights not only the immense capital intensity of cutting-edge AI development but also an escalating arms race for computational supremacy against giants like OpenAI and Google. The integration with X Corp, providing vast datasets and a deployment platform for models like Grok, blurs the lines between social media and fundamental AI development, giving xAI a unique, albeit controversial, advantage. However, experts note the high-risk nature of this strategy, considering rumored "double-digit interest rates" on the debt. This decision signals colossal bets on future breakthroughs and rapid monetization in the AI realm, where computing power is becoming the ultimate kingmaker.
Elon Musk's xAI Secures $5B Debt Financing for AI Infrastructure and "Colossus" Supercomputer
