Musk vs. Trump: Risk to xAI’s $5B Deal?
The High-Stakes Clash That Could Impact xAI Funding
The very public feud between Elon Musk and former President Donald Trump has created surprising ripple effects – while driving engagement on Musk’s X platform, it may be undermining confidence in xAI’s ambitious $5 billion debt offering.
Merger and Financial Ambitions Collide With Political Drama
Following this year’s merger between X (formerly Twitter) and xAI, Musk’s artificial intelligence venture now faces a crucial financing challenge. Reports indicate xAI aims to raise:
- $5 billion through debt securities (via Morgan Stanley)
- An additional $300 million through a secondary share sale
Timing Couldn’t Be Worse for Investor Pitches
On Thursday, as Morgan Stanley executives pitched potential investors on xAI’s debt offering, Musk and Trump were simultaneously engaged in a bitter online spat across their respective platforms. This created what sources describe as an “awkward” environment for the crucial funding discussions.
Market Response: Investor Concerns Emerge
Market indicators show growing investor apprehension:
- Debt trading below target at 95 cents on the dollar (vs. desired 100 cents)
- Potential need for Morgan Stanley to offer improved terms (higher interest rates)
- Uncertainty about how the political drama might impact xAI’s valuation
The coming days will reveal whether Musk can salvage investor confidence in xAI’s financial future, or if the Trump controversy will exact a measurable toll on this critical funding round.