Elon Musk is raising$5 billion in debt for his AI company xAI Corp., in a move that signals a renewed focus on his business ventures after stepping away from a prominent political role.

Investment bank Morgan Stanley is leading the offering, which includes a floating-rate loan, a fixed-rate loan, and senior secured notes - all priced with double-digit interest rates, according to people familiar with the deal.

Proceeds will be used for general corporate purposes, including accelerating development of xAI's infrastructure, such as its vast Memphis-based data centre, Colossus.

The site currently houses 200,000 GPUs and could soon expand to over one million as Musk ramps up efforts to train advanced AI models. The debt package has already attracted over$3.5 billion in early demand, with commitments due by 17 June.

Musk's move to raise capital for xAI comes after a string of fundraising rounds across his companies, including$650 million for Neuralink and a$300 million secondary stock sale in xAI.

He has also merged xAI with his social media platform X into a new entity, XAI Holdings, further aligning his ventures in AI, communications, and computing.

Musk's focus on his business empire follows a controversial period in politics. As a senior adviser and key backer of Donald Trump during the 2024 election, Musk faced scrutiny both personally and in relation to the performance of Tesla, whose stock has dropped 20% since the presidential inauguration.

Morgan Stanley's continued involvement underscores the bank's deep ties with Musk, having previously advised on his$44 billion acquisition of Twitter (now X).

While that deal initially left lenders with billions in risky debt, recent improvements in Musk's business standing helped the bank clear the remaining liabilities earlier this year.

The latest xAI debt sale is another indicator of investor appetite for AI ventures, especially when tied to high-profile figures like Musk. If successful, it will also strengthen the infrastructure needed to support Musk's vision of AI leadership through xAI and its associated platforms.

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