After Musk stepped down from DOGE, companies under his umbrella saw a wave of fundraising: xAI issued both stocks and bonds, while Neuralink also raised funds
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After Musk stepped down from DOGE, companies under his umbrella saw a wave of fundraising: xAI issued both stocks and bonds, while Neuralink also raised funds
xAI, Elon Musk's company, is launching a $300 million share sale, valuing the company at $113 billion in this transaction.
Navigating Web3 tides with focused insightsBy He Hao, Wall Street Insights
After Elon Musk returned to his business empire and stepped back from politics, companies under his umbrella swiftly initiated a series of fundraising activities. This includes xAI launching a $300 million share sale, as well as initiating a $5 billion debt offering. Additionally, the brain-computer interface company Neuralink raised $650 million in its Series E round.
xAI Raises Funds via Equity and Debt
On Monday, media reports indicated that Elon Musk's xAI is launching a $300 million share sale, allowing employees to sell shares to new investors. The transaction values the company at $113 billion—matching the valuation when Musk’s xAI acquired his social media platform X in March this year.
Musk merged xAI with his social media platform X earlier this year into a newly formed entity called XAI Holdings. The March acquisition valued the entire group at $113 billion, with xAI itself valued at $80 billion and X at $33 billion. Musk originally acquired X (formerly Twitter) in October 2022 for $44 billion.
Industry insiders noted that this secondary stock sale, known as a tender offer, is expected to be followed by a larger funding round in which the company will issue new shares to outside investors.
Earlier in April, media reported that xAI was in talks with investors to raise approximately $20 billion for its newly combined AI startup and social media business—a move highlighting both market enthusiasm for artificial intelligence and Musk’s continued influence.
In addition, Musk has also launched a $5 billion debt offering for xAI. According to reports, Morgan Stanley is seeking debt financing for xAI, which could help fund Musk’s aggressive investments in AI infrastructure, particularly the construction of a massive data center named Colossus in Memphis.
A知情人士 told the media that the debt financing package includes a Class B term loan, fixed-rate term loans, and senior secured notes. The proceeds will be used for general corporate purposes, with the commitment deadline set for June 17.
xAI declined to comment on these reports.
Regarding the merger of xAI and X into a single company, Musk previously stated that the integration would enable synergies by combining models, computing power, distribution channels, and talent. For example, AI developers could better leverage social media platform data to train their models and reach its user base.
Musk has not disclosed further details about the specific structure of the March merger between xAI and X. Analysts suggest that the opaque nature of the deal allows X to benefit from xAI’s rising valuation.
Musk founded xAI in 2023 to compete with Sam Altman’s OpenAI and other major tech companies. The AI startup reached a $45 billion valuation in a $500 million private funding round at the end of last year. Last year, Musk also granted investors who supported his Twitter acquisition a 25% stake in xAI.
xAI quickly launched the Grok chatbot and built the Colossus supercomputer cluster, one of the largest AI data center projects in the United States. In addition to competing with big tech firms—and Grok’s occasionally "edgy" persona—Musk has also secured several partnerships. Last month, Microsoft announced it would offer xAI models to its cloud customers, while messaging app Telegram agreed to distribute Grok to its one billion users.
On May 20, Musk revealed that his Memphis data center had already deployed 200,000 GPUs for training AI systems, with plans to add another 1 million GPUs at a nearby location.
Neuralink Raises $650 Million
Media reports indicate that Musk has also raised $650 million for his brain-computer interface company Neuralink, valuing the firm at $9 billion pre-investment.
Neuralink’s previous valuation was $3.5 billion, based on a 2023 funding round.
Musk Returns to Business Empire from DOGE Role
Previously, Musk spent several months serving as a senior advisor to Donald Trump, frequently attending events alongside him and acting as one of his key financial backers for the 2024 presidential campaign. His role at the U.S. Department of Government Efficiency (DOGE) ended last week. During his tenure, he proposed sweeping government spending cuts, drawing widespread criticism and raising concerns about the performance of his companies.
This wave of fundraising follows Musk’s exit from his position overseeing administrative cost-cutting efforts in the Trump administration. Analysts suggest Musk appears eager to refocus on his business ventures. Since Trump took office, Tesla, where Musk serves as CEO, has seen its stock price drop by 20%.
Musk previously stated he would refocus on his business portfolio after his companies suffered due to their association with President Trump. At the end of last month, Musk wrote on X:
Back to 24-hour work mode, sleeping in meetings/server rooms/factories. I must fully focus on X/xAI and Tesla. We are at a critical stage for key technology releases.
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