Will Musk vs. Trump Affect xAI’s $5 Billion Debt Deal?

The recent online feud between Elon Musk and President Donald Trump has captured the attention of many, driving significant traffic to Musk’s social media platform X, formerly known as Twitter. However, this public spat may have unintended consequences for the platform’s parent company, xAI.

Earlier this year, Musk made headlines by merging X and xAI, a move that was seen as a strategic consolidation of his business empire. As part of this merger, Musk is reportedly seeking to raise $5 billion in debt, along with an additional $300 million through a secondary sale, to fund the newly combined entity.

The timing of this financial maneuver is complicated by Musk’s deteriorating relationship with Trump, once considered an ally. According to The Wall Street Journal, Morgan Stanley, the financial institution facilitating the debt sale, had gathered xAI executives to pitch to potential investors just as Musk and Trump were exchanging heated remarks on their respective social media platforms.

Initially, Morgan Stanley aimed to sell the debt at 100 cents on the dollar. However, market conditions have been less favorable, with the debt trading at 95 cents on the dollar at times. This has led investors to speculate that Morgan Stanley might need to offer additional incentives, such as a higher interest rate, to attract buyers.

The unfolding drama between Musk and Trump adds an unpredictable element to xAI’s financial prospects, raising questions about the potential impact on investor confidence and the company’s ability to secure the necessary funding.