"Markets Cheer Musk’s Return to Business"
"Markets Cheer Musk’s Return to Business"
“Business is better than politics”: Market welcomes Elon Musk’s return after leaving government role
Investors responded positively by purchasing $5 billion worth of xAI startup debt after Elon Musk stepped away from his advisory role in the Trump administration to focus entirely on his business empire.
Bloomberg reported that Elon Musk, billionaire founder of Tesla Inc., successfully sold $5 billion in debt for his artificial intelligence startup, xAI Corp. This latest fundraising initiative is one of several in Musk’s business ventures and signals strong investor confidence following Musk’s announcement that he is stepping away from politics and resuming full control of his companies.
According to the report, Morgan Stanley is in talks to purchase the xAI debt, which offers interest rates in the double digits. Sources familiar with the negotiations said the funds will enable Musk to aggressively invest in AI infrastructure, including building a massive data center in Memphis, Tennessee.
The debt package includes floating-rate term loans, fixed-rate term loans, and secured bonds. Proceeds will be used for general corporate purposes, with a maturity date set for June 17. Initial negotiations indicate xAI’s floating-rate bonds offer yields about 7 basis points above market average, and the secured bonds offer interest as high as 12%. Investor demand reportedly exceeded the offering size by $3.5 billion.
In addition to the xAI deal, Musk has also raised $650 million for Neuralink Corp., a neurotechnology company, and is selling $300 million in xAI shares on the secondary market, according to the Financial Times.
Musk appears eager to refocus on his business ventures after recently announcing his departure from politics. He had spent the previous months as a senior advisor and close ally of former President Donald Trump, supporting his 2024 campaign both strategically and financially.
CNBC reported similarly that within the first week of Musk’s resignation from the Department of Government Efficiency (DOGE), his companies began receiving more positive responses. Neuralink raised $650 million, while Tesla’s sales in Norway rose 213% year-over-year in May.
While the connection between Musk’s political exit and the fundraising success remains unclear—since the processes began while he was still involved in the White House—the timing serves as a reminder of why Musk retains strong support from investors.
Even though Musk’s companies are fundamentally successful, they still require stable leadership—much like Tesla’s promised “full self-driving” feature, which has yet to reach true autonomy. His businesses continue to need clear direction and “full focus” from a dedicated leader