While the high-profile online dispute between Elon Musk and former President Donald Trump has boosted activity and engagement on Musk’s social media platform, X (formerly Twitter), it may also complicate matters for Musk’s newly formed entity, xAI.
Earlier this year, Musk combined X with xAI, setting the stage for ambitious plans to secure substantial funding for the merged venture. Recently reported aspirations to raise $5 billion in debt financing, alongside an additional secondary offering of $300 million, demonstrate Musk’s continued aggressive financial strategy to support his expanded digital empire.
But the escalating tensions between Musk and Trump, once political allies now turned public adversaries, come at an inopportune moment for the financial fortunes of the company. This week, as Morgan Stanley led a meeting with xAI executives to market the sizable debt offering to prospective investors, the feud between the billionaire entrepreneur and the former U.S. president spilled dramatically onto social media platforms, with the two exchanging heated online barbs.
Initial expectations from Morgan Stanley were reportedly optimistic, with the bank targeting pricing of roughly 100 cents on the dollar for the debt issue. However, heightened market uncertainty triggered by Musk and Trump’s public conflict apparently drove down the debt’s trading value, at times dipping to 95 cents on the dollar. Sources close to the negotiations suggest these developments might force Morgan Stanley to sweeten the offer by raising interest rates or providing additional incentives to attract wary investors.
