Musk's AI company xAI is simultaneously promoting two fundraising channels, borrowing $5 billion from investors on one hand while negotiating $4.3 billion in equity fundraising on the other. Since its establishment in 2023, xAI has raised nearly $14 billion, but as of the end of March this year, only $4 billion in cash remains. This round of capital increase is not only to fill the funding gap but also attempts to attract investors back.
Only $4 billion left on the books, needs to raise $9.3 billion to survive.
According to reports, before launching the debt fundraising plan this year, xAI, founded in 2023, has raised a total of $14 billion through equity fundraising. However, xAI is burning cash rapidly, and as of March 31 this year, the company has only $4 billion in cash left, indicating that most of the raised funds have been invested in operations, increasing financial pressure.
To continue operations, xAI is promoting a dual fundraising plan. In addition to issuing $5 billion in bonds externally, it is also negotiating a $4.3 billion equity fundraising to strengthen cash flow. It is understood that this new equity injection has also brought back previously hesitant investors.
Modified bond terms to appease creditors, also obtained a $650 million rebate.
To alleviate concerns in the creditor market, xAI has modified the bond terms, which include:
Restrict the company from transferring assets to protect the rights of creditors' collateral.
Establish a ceiling on secured debt to prevent unlimited expansion of debt scale.
The above adjustments are intended to boost investor confidence, with the submission deadline for the bond investment commitment set for June 17. In addition to external fundraising, xAI also has the opportunity to receive a $650 million rebate from one of its manufacturing partners. Insiders revealed that this rebate helps reduce overall operating costs and alleviate short-term pressure.
xAI's valuation has reached $80 billion.
Despite the rapid cash burn, xAI's market valuation continues to rise, from $51 billion at the end of 2024 to $80 billion in Q1 2025. Notable institutions that have participated in investments include a16z, Sequoia Capital, VY Capital, and others.
It is worth noting that Musk has recently officially incorporated xAI into the social platform X, but according to internal plans, the $4.3 billion raised will be entirely invested in xAI's AI business development, separate from the operations of the social platform, to avoid confusion about the use of funds.
This article on Musk's xAI raising $9.3 billion to survive, reaching a valuation of $80 billion, first appeared on Chain News ABMedia.
