TechFlow news, June 18 — According to Jinshi citing sources, Musk's xAI company is expected to complete $5 billion in debt financing. Investor demand for the round has been limited, with coverage at 1.5x, and fund allocation will take place on Wednesday. Musk's xAI is experiencing rising costs, spending $1 billion per month. The company is attempting to raise $9.3 billion.
Musk's AI startup xAI is seeking to raise $9.3 billion through debt and equity financing. However, according to deal terms shared with investors, the company plans to spend more than half of the funds within three months of receiving them. The speed at which the company raises and burns through cash highlights the unprecedented capital demands of the AI industry and, at least in xAI's case, the relatively modest revenues generated so far. Sources revealed that based on leveraged cash flow projections, the company expects to consume approximately $13 billion during 2025, exceeding $1 billion per month. As a result, the company's extensive fundraising efforts barely keep pace with its expenditures.
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