Musk vs. Trump: Threat to xAI $5B Deal?
Public Feud Creates Investor Jitters During Critical Funding Round
The escalating online clash between Elon Musk and former President Donald Trump might be generating buzz for Musk’s social platform X (formerly Twitter), but it’s casting doubts over xAI’s $5 billion fundraising efforts.
Merger and Money Troubles
Following the merger of X and xAI earlier this year, Musk is seeking substantial capital injections. Reports indicate plans for:
- $5 billion debt offering through Morgan Stanley
- Additional $300 million in secondary sales
CEO Drama During Investor Pitches
The timing couldn’t be worse – as xAI executives were pitching to potential investors last Thursday, Musk and Trump were publicly feuding across social media. According to sources, this created an awkward atmosphere during critical funding discussions.
Market Headwinds Emerge
Financial markets reacted to the turmoil:
- Debt initially targeted at 100 cents on the dollar
- Traded as low as 95 cents during the controversy
- Potential need for higher interest rates to attract investors
Strategic Implications for AI Ambitions
This public relations challenge comes at a pivotal moment for xAI’s artificial intelligence development goals. The company’s ability to secure favorable terms for its massive funding round now depends partly on Musk’s ability to navigate both business strategy and political dynamics.
Experts suggest the situation illustrates how personal conflicts between high-profile tech leaders and politicians can create unexpected financial consequences for their ventures.