Elon Musk’s artificial intelligence startup, xAI, is now seeking a valuation of $113 billion in a secondary share sale, just three months after being valued at $80 billion following its merger with social media platform X.
That near-30% increase in value, without any public details on revenue, commercial partnerships or a product roadmap, reveals strong appetite from early backers, but whether broader investors will share that enthusiasm is far from certain.
Share sale
The share sale, reportedly worth $300 million, will allow employees to cash in on their holdings ahead of a larger equity raise.
At the same time, Morgan Stanley is shopping a $5 billion debt package to fund xAI’s expansion.
The financing mix includes a term loan B, fixed-rate loan and senior secured notes, with commitments due by 17 June.
Proceeds will go toward general corporate purposes, although how that capital will be deployed remains vague.
Short gestation
xAI was formed less than two years ago and has since acquired X, Musk’s social media platform formerly known as Twitter.
The combination promises to blend generative AI with real-time user data, but the business model behind that ambition is still unclear.
While Musk’s track record continues to draw capital, investors now face a familiar challenge: distinguishing between visionary potential and commercial reality.