Musk’s xAI sweetens debt offering as investors face deadline

The offering launched earlier this month and has been impacted by Musk’s fallout with US President Donald Trump, as well as investor concerns about xAI’s financial wherewithal

Elon Musk’s artificial intelligence startup xAI Corp. offered investors sweeter pricing on its $5 billion debt offering Friday, the same day Morgan Stanley is wrapping up commitments for the deal.

The package now includes $3 billion of bonds with a 12.5% yield, a $1 billion fixed-rate term loan with a 12.5% interest rate and a $1 billion term loan B priced at 7.25 percentage points over the benchmark rate at a discount of 96 cents on the dollar, according to a person familiar with the matter. Each of the components had been priced at lower rates and the term loan B had a smaller discount.

Some investors expected the company would need to raise yields on the debt to close the deal.

The offering launched earlier this month and has been impacted by Musk’s fallout with US President Donald Trump, as well as investor concerns about xAI’s financial wherewithal. The company decided to raise another $4.3 billion in equity and change some terms on debt documents to assuage those worries, Bloomberg previously reported.

Commitments were originally due on Tuesday, but Morgan Stanley extended the time frame. Spokespeople for xAI and the bank did not immediately respond to requests for comment.