Elon Musk’s social platform X and artificial intelligence startup xAI are reportedly gearing up to repay a hefty sum of approximately $17.5 billion in outstanding debt in full, according to a recent report by Bloomberg News. This update was initially shared by sources familiar with the matter, indicating that Morgan Stanley, who facilitated the debt financing for both companies, has informed existing lenders about the repayment plans.
X, formerly known as Twitter, took on around $12.5 billion in debt during Musk’s acquisition of the company, while xAI separately borrowed about $5 billion through bonds and loans last June. The two companies merged under xAI Holdings, with a significant portion of the debt being relatively recent and potentially carrying early repayment penalties.
It is worth noting that xAI’s $3 billion in high-yield bonds are anticipated to be redeemed at 117 cents on the dollar, showcasing a premium due to the debt’s expected duration of at least two years. Despite X servicing monthly debt payments in the tens of millions of dollars and xAI reportedly burning through approximately $1 billion in cash monthly as it heavily invests in data centers, chips, and AI talent, xAI successfully completed a funding round in January, securing $20 billion in new equity.
These repayment plans coincide with Musk’s efforts to consolidate his various businesses, with SpaceX recently acquiring xAI as a subsidiary to explore space-based data centers. The combined entity is currently valued at approximately $1.25 trillion, with SpaceX reportedly eyeing a confidential IPO filing as early as this month, potentially setting the stage for a public listing later this year.
Representatives for Morgan Stanley declined to comment on the matter, while X and xAI have yet to respond to requests for statements. The development signals a significant financial milestone for both companies, reflecting Musk’s strategic maneuvers in the tech and AI landscape. The post Elon Musk’s xAI and X to pay off $17.5B debt in full: report first appeared on TESLARATI.