MorganStanley

American investment bank Morgan Stanley is launching a $5 billion funding package for xAI, Elon Musk’s artificial intelligence startup. The deal includes both fixed-rate bonds and floating-rate loans, offering investors a choice between two yield structures. However, enthusiasm has started to cool — largely due to xAI’s $341 million first-quarter loss and increasing political tensions.

🔹 What Exactly Is Morgan Stanley Offering?
The offering, which began last week, includes:
🔹 A Term Loan B – with a floating rate priced at 97 cents on the dollar and yielding 700 basis points above SOFR.

🔹 An alternative package – offering fixed-rate bonds and loans with a 12% yield.
Sources say these terms may be adjusted depending on investor demand. Initial buzz saw commitments exceeding $3.5 billion, but interest has since slowed, prompting the bank to reach out to smaller lenders who had been excluded from earlier talks.

💸 Investors Wary: xAI’s Losses and Musk-Trump Rift Cast a Shadow
According to insiders, the offering currently matches its target size of $5 billion, but lacks the oversubscription banks typically hope for. A final investor list is expected by June 17.
Morgan Stanley is being cautious this time, clearly seeking to avoid a repeat of the 2022 Twitter takeover debacle, where the bank and others financed Musk’s acquisition of Twitter (now X) with $13 billion in debt. Following Fed rate hikes and turmoil in Musk’s restructuring of the platform, the banks ended up stuck with the debt on their books for over two years.
Now, the bank is opting for a “best-efforts” approach with no capital commitment or underwriting guarantee, shaping the deal around actual investor interest rather than a pre-committed structure.

📉 xAI Reports $341 Million Loss – Musk Still Sees a Breakthrough Ahead
At last week’s investor meeting, xAI leadership revealed a $341 million EBITDA loss for Q1 2025. Despite this, they expressed confidence that the company could reach profitability in the coming years.
Investors pledging at least $50 million were given access to internal financial data, including cash flow projections, revenue forecasts, and future profit estimates.
Despite the red numbers, xAI’s valuation has soared. Following its merger with Musk’s social network X, the company is now valued at $94 billion, up from $51 billion at the end of 2024. The new entity, XAI Holdings, was valued at $113 billion in March, with xAI accounting for $80 billion and X for $33 billion.

🔁 Quiet Merger and Secondary Share Sale in the Works
The merger was executed with minimal outside consultation, involving only a tight circle of Musk’s trusted advisors.
Roughly a week ago, xAI announced plans for a $300 million secondary share offering, giving employees the chance to sell shares to external investors. This not only creates liquidity but also reinforces the company’s latest valuation.
Sources close to the matter say this could pave the way for a larger capital raise through a new stock issuance.

⚠️ Political Risk: Musk vs. Trump
While analysts pour over balance sheets, another risk looms large — growing tension between Elon Musk and Donald Trump. Their recent public spat has raised doubts over potential federal contracts, adding a layer of political uncertainty to the investment.

One-Minute Summary:
🔹 Morgan Stanley launches a $5 billion bond and loan package for xAI.

🔹 Investor appetite dampened by $341 million quarterly loss and political risks.

🔹 xAI’s valuation jumps to $94 billion after merging with Musk’s social platform X.

🔹 The bank uses a cautious approach, avoiding overexposure like in the 2022 Twitter deal.

📊 What do you think? Is xAI the next tech revolution, or just another overhyped burn-out?

#ElonMusk , #XAI , #MorganStanley , #market , #WallStreet

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$1.4 TRILLION giant Morgan Stanley just revealed that 6% of its institutional fund portfolio is now in #Bitcoin instruments! 🔥🔥
Why This is Massive:
🔸 Institutional Adoption is Here: One of the world’s largest financial institutions is now holding a significant portion of its portfolio in Bitcoin-related assets! 🏦💼
🔸 $BTC’s Growing Influence: This is a clear signal that Bitcoin is gaining major traction among traditional finance giants. 🏛️💪
🔸 More Funds to Follow: As Morgan Stanley leads the charge, expect more institutional players to start allocating to Bitcoin, boosting demand. 📈🚀
🔸 Bitcoin’s Future Looks Bright: With institutions investing, the long-term outlook for Bitcoin has never been stronger! 🌟
The Impact:
💥 Institutional support could fuel an even bigger bull run for Bitcoin.
💥 More stability and credibility for BTC in global markets.
💥 FOMO might kick in as other funds and investors start piling in! 🤑
This is just the beginning! 👀
Get ready for a Bitcoin revolution in institutional finance! 🚀🚀
#bitcoin☀️ #CryptoNews🚀🔥 #morganstanley #USDataImpact

Banking giants in the United States have set their sights on the expanding stablecoin market through a joint venture.
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A Wall Street Journal report on Thursday, citing people familiar with the matter, disclosed this new development. The proposed business will see major US banks compete with digital asset firms to gain relevance in the stablecoin market.
Banks Exploring Joint Stablecoin Issuance
The people familiar with the matter specifically mentioned that top US banks like JP Morgan Chase, Citibank, Bank of America, and Wells Fargo were part of the joint stablecoin issuance initiative. Other commercial banks involved in the enterprise include Early Warning Services—Zelle’s payment system operator—and the Clearing House.

Meanwhile, the possible bank consortium is still in its early stage and remains highly speculative. The report highlighted that the giant financial institutions are hinging the venture on a clear, stablecoin regulatory framework and their clientele’s demand for the real-world asset-backed cryptocurrency.
Notably, the former concern could be over soon, as the GENIUS Act recently progressedto the final senatorial approval stage. With a 66-32 vote on Monday, bipartisan support brought the stablecoin bill one step closer to passing.
Stablecoin Near Mainstream Adoption
Interestingly, the proposed venture reflects a warmer disposition among legal financial institutions toward the crypto industry. This further unveils the asset’s growing utility beyond the corridors of the digital asset industry.
Stablecoins are pegged 1:1 with fiat currencies, and their digital features and functionality are suitable for swift and low-cost transactions. These top US banks are exploring the possibilities of enhancing their slow and pricey cross-border transactions with technological innovation.
Meanwhile, demand for stablecoins is rising as major institutions continue to adopt the asset. Fintechs like Ripple and PayPal have created their own stablecoins to enhance their payment businesses. The World Liberty Financial, Donald Trump’s family business, also recently launched its native stablecoin.

Nations are also exploring the fiat-pegged cryptocurrency, with the United States in the mix. On Wednesday, the White House’s AI and crypto czar, David Sacks, noted that stablecoins will unlock trillions of dollars for the US Treasury.
Furthermore, the proposed venture emphasizes the growing mingling of digital and traditional financial systems. While crypto firms like Coinbase and Circle are pursuing bank charters, major banks like JPMorgan and Standard Chartered are exploring ways to increase exposure to blockchain technology.
DisClamier:
This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect @Lachakari_Crypto opinion. Readers are encouraged to do thorough research before making any investment decisions. @Lachakari_Crypto is not responsible for any financial losses.
$BTC
#BTC☀ #MorganStanley #MarketPullback #ETHMarketWatch #BinanceAlphaAlert