Will Musk vs. Trump Affect xAI’s $5 Billion Debt Deal?
The ongoing online feud between Elon Musk and former President Donald Trump, while seemingly beneficial for Musk’s social media platform X (formerly Twitter) by driving traffic, may pose challenges for xAI, the platform’s parent company.
Earlier this year, Musk merged X and xAI. Bloomberg reported that he was seeking to raise $5 billion in debt, along with a reported $300 million in a secondary sale, to fund the newly combined entity.
This fundraising effort coincides with a deterioration in the relationship between Musk and Trump. The Wall Street Journal reported that Morgan Stanley, tasked with managing the debt sale, gathered xAI executives to pitch potential investors. This occurred while Musk and Trump were publicly exchanging criticisms on their respective social networks.
Morgan Stanley initially aimed to sell the debt at around 100 cents on the dollar. However, a trader informed the WSJ that it traded as low as 95 cents on the dollar at times on Thursday. Investors have also indicated that the declining prices might compel Morgan Stanley to offer additional incentives, potentially through an increased interest rate.
