XAI, Elon Musk's artificial intelligence startup, raised $5 billion in debt and $5 billion in equity.
The funding will go towards xAI's efforts to build out its AI infrastructure and develop its Grok chatbot. XAI's raise will help it compete against rivals OpenAI and Anthropic.
Elon Musk announced his new company xAI, which he says has the goal to understand the true nature of the universe.
Jaap Arriens | Nurphoto | Getty ImagesXAI, the artificial intelligence startup run by Elon Musk, has raised a combined $10 billion in debt and equity, Morgan Stanley said.
Half of that sum was clinched through secured notes and term loans, while a separate $5 billion was secured through strategic equity investment, the bank said Monday.
The funding gives xAI more firepower to build out infrastructure and develop its Grok AI chatbot as it looks to compete with bitter rival OpenAI, as well as with a swathe of other players including Amazon-backed Anthropic.
In May, Musk told CNBC that xAI has already installed 200,000 graphics cessing units, or GPUs, at its Colossus facility in Memphis, Tennessee.
Colossus is xAI's supercomputer that trains the firm's artificial intelligence.
Musk at the time said that his company will continue buying chips from semiconductor giants Nvidia and Advanced Micro Devices and that xAI is planning a 1 million GPU facility outside of Memphis.
Addressing the funds raised by the company, Morgan Stanley that "the ceeds will support xAI's continued development of cutting-edge AI solutions, including one of the world's largest data center and its flagship Grok platform.
"XAI continues to release to Grok and unveiled the Grok 3 AI model in February.
Musk has sought to boost the use of Grok by integrating the AI model with the X social media platform, formerly known as Twitter.
In March, xAI acquired X in a deal that valued the site at $33 billion and the AI firm at $80 billion. It's un if the new equity raise has changed that valuation. XAI was not immediately available for.
Last year, xAI raised $6 billion at a valuation of $50 billion, CNBC reported. Morgan Stanley said the debt offering was "overd and included minent global debt investors.
"Competition among American AI startups is intensifying, with companies raising huge amounts of funding to buy chips and build infrastructure.
OpenAI in March closed a $40 billion financing round that valued the ChatGPT developer at $300 billion. Its big investors include Microsoft and Japan's SoftBank.
Anthropic, the developer of the Claude chatbot, closed a funding round in March that valued the firm at $61. The company then received a five-year $2. 5 billion revolving credit line in May.
Musk has called Grok a "maximally truth-seeking" AI that is also "anti-woke," in a bid to set it apart from its rivals. But this has not come without its fair of controversy.
Earlier this year, Grok responded to user queries with unrelated s the controversial topic of "white genocide" and South Africa.
Musk has also clashed with fellow AI leaders, including OpenAI's Sam Altman.
Most famously, Musk claimed that OpenAI, which he co-founded, has deviated from its original mission of AI to benefit humanity as a nonfit and is instead focused on commercial success.
In February, Musk alongside a group of investors, put in a bid of $97. 4 billion to buy control of OpenAI. Altman swiftly rejected the offer.
— CNBC's Lora Kolodny and Jonathan Vanian contributed to this report.