Founded in 2023, xAI has positioned itself as an anti-establishment AI player. Elon Musk’s artificial intelligence startup xAI is closing in on a $9.3 billion capital raise despite recent tensions between Musk and President Donald Trump that temporarily clouded investor sentiment. The deal includes $5 billion in debt and $4.3 billion in equity, providing a critical infusion of capital as the company scales its infrastructure to take on industry leaders like OpenAI and Google, the Financial Times reported. According to people briefed on the matter, investors have already placed orders exceeding $5 billion for a bond and loan offering being managed by Morgan Stanley. The appetite has given bankers confidence to finalize the debt portion of the deal, while the equity raise is proceeding in parallel. Story continues below Advertisement Remove Ad Founded in 2023, xAI has positioned itself as an anti-establishment AI player. Its chatbot, Grok, launched as a provocative alternative to ChatGPT and Gemini, markets itself as committed to “truth-seeking” over political correctness. In March, xAI was merged with Musk’s social media platform X in a move that valued the combined group at $113 billion. Trump tensions briefly spook investors The fundraising effort hit a bump earlier this month amid a public feud between Musk and Trump. Once described by Musk as his “first buddy,” Trump and Musk exchanged barbs online, unsettling some investors who had seen Musk’s proximity to the White House as a key strategic advantage. Musk had previously emphasized his strong ties to President Trump while courting investors, suggesting that his political connections could provide regulatory and business leverage against AI rivals. The unravelling of that relationship caused several potential backers to pull back, sources told the Financial Times. Still, major investors including TPG Angelo Gordon are stepping in. The firm has committed $1 billion to anchor the debt offering, which will include a mix of fixed- and floating-rate bonds, reportedly priced to yield around 12 percent. Final commitments are due Tuesday, with pricing expected later in the week. A high-burn race for dominance Story continues below Advertisement