Latest news with #xAI
CNA
4 hours ago
- Business
- CNA
Musk's xAI extends deadline and ups yield on bonds following lukewarm demand, source says
NEW YORK :Elon Musk's xAi extended the deadline and increased the yield it is paying on a $5 billion debt sale following lukewarm reception from investors, a person with direct knowledge of the matter said on Friday. The deadline for investors to commit to buying into the deal, which includes bonds and loans, was extended from Tuesday to Friday, this person said, asking not to be named because the details of the deal were private. xAI also upped the yield on the $3 billion in bonds and a $1 billion term loan from 12 per cent to 12.5 per cent yield, they said. xAi sweetened the pot on a second term loan from 700 basis points to 725 basis points over the Secured Overnight Financing Rate, known as SOFR. The term loan B is set to be priced at a discount of 96 cents on the dollar, the person said. xAI and Morgan Stanley, which is leading the deal, didn't immediately respond to requests for comment. High-yield bonds paid an average yield to maturity of 7.6 per cent as of Thursday, according to ICE BofA High Yield Index. Investors are demanding more for xAI's debt because the company and its bonds are not yet rated, giving investors little visibility into the company's finances and increasing the risk. An increase in the yield offer could mean that investors had probably agreed to buy the debt only for a higher yield. The borrower also has lesser flexibility on pricing when investor demand is modest. If the deal closes on Friday, Morgan Stanley will distribute the securities to investors on Monday, this person said. The xAI offering, which was reported on June 2 as Musk and U.S. President Donald Trump traded barbs over social media, did not receive overwhelming interest from high-yield and leveraged loan investors, Reuters reported earlier this week. One portfolio manager, who said he passed on the bonds, said a "good deal" will typically be oversubscribed by three to four times. xAI would up the yields if it didn't attract enough investors, he added. Unlike Musk's debt deal when he acquired Twitter, Morgan Stanley did not guarantee how much it would sell or commit its own capital to the deal, in what is called a "best efforts" transaction, according to one person familiar with the terms.
Time of India
8 hours ago
- Business
- Time of India
xAI increases yield offer on $5 billion debt raise: Source
Elon Musk's xAI is increasing the yield it is offering on a $5 billion debt raise led by Morgan Stanley , a source with knowledge of the matter said on Friday. xAI is offering to pay 12.5% yield on $3 billion in bonds, said the source who asked for anonymity to disclose non-public information. Previously, sources told Reuters the company offered a 12% yield. The AI startup is also offering 12.5% fixed yield on a $1 billion term loan and set to price a $1 billion term loan B at 725 basis points over the Secured Overnight Financing Rate, known as SOFR. The term loan B is set to be priced at a discount of 96 cents on the dollar, the source said. The deadline for investor commitments was extended from Tuesday to Friday and allocations will be done on Monday, the source said. xAI and Morgan Stanley did not immediately comment on the matter. Live Events
Wall Street Journal
9 hours ago
- Business
- Wall Street Journal
EU Quizzes Musk's X over xAI Takeover Amid Digital Services Act Probe
The European Union's tech enforcers have sent questionnaires to Elon Musk's X after his xAI business acquired the social network this year. The scrutiny comes as the European Commission moves forward with an investigation into X under the Digital Services Act, the bloc's new rulebook that obliges companies that run popular platforms to do more to tackle harms online, from poor transparency in e-commerce to disinformation on social media.
Arabian Post
9 hours ago
- Business
- Arabian Post
EU Intensifies Oversight of Musk's xAI–X Deal
European Commission regulators have launched an in-depth inquiry into the corporate restructuring of X following its $33 billion acquisition by Elon Musk's AI venture, xAI in March. Officials have issued formal information requests probing whether the deal reshaped the obligations and liabilities under the Digital Services Act, which could trigger fines of up to 6 per cent of global turnover or even a suspension of operations within the EU. At stake is not merely compliance but scope. Brussels is examining if revenue from Musk's wider corporate empire—including xAI, SpaceX, Neuralink and The Boring Company—should be aggregated with X's earnings when calculating any DSA penalty. Such consolidation would dramatically increase the financial stakes, positioning the potential fine among the largest ever under the regulation. This intensified scrutiny builds upon a probe initiated in December 2023 over allegations that X failed to curb harmful content and employed deceptive design. The spotlight has honed in on features such as the blue check verification, which critics say misled users into attributing credibility purely on subscription status. X has contested these accusations, reflecting the gravity with which Brussels regards compliance under the DSA. ADVERTISEMENT Regulatory sources indicate that Brussels aims to reach a decision before its summer recess in August 2025—though there remains a possibility that deliberations will extend. If a penalty is levied, whether tied solely to X or inclusive of Musk's other holdings, the platform could face a multi‑billion‑dollar bill. Repeat offenders risk more severe sanctions, including operational bans within the bloc. The commission's current line of inquiry follows earlier requests for internal documentation on X's algorithmic decision‑making and moderation protocols issued in January 2025, aimed at uncovering systemic bias or political amplification. EU digital chief Henna Virkkunen has signalled that the commission's enforcement of the DSA will be uniform across all major platforms—regardless of headline-grabbing personalities or companies. For the xAI–X merger, Brussels appears particularly concerned with whether the March acquisition alters liability thresholds or the classification of X as a 'Very Large Online Platform'—a designation that comes with more rigorous reporting and compliance obligations. The structure of the deal could influence if DSA fines are calculated based solely on X or on the broader Musk group. European digital regulators are keen to demonstrate the potency of the DSA, which took effect in late 2022, aiming to set a precedent in holding tech giants accountable across interconnected corporate structures. X's contested manoeuvres with the blue checkmark and structural repositioning have become emblematic of the challenges regulators face enforcing meaningful accountability. Musk's companies have so far declined to respond to the commission's most recent information requests. Meanwhile, EU officials continue to gather internal documents, revenue data and structural filings to determine the extent of exposure under DSA provisions before any final ruling.
Gulf Insider
9 hours ago
- Business
- Gulf Insider
Elon Musk On The Coming AI "Tsunami"
Tech billionaire Elon Musk waxed poetic about his time leading the Department of Government Efficiency in Washington, D.C., describing the experience as significant but secondary to a more pressing challenge: preparing society for the rapid rise of disruptive artificial intelligence. 'Fixing the government is like, say, the beach is dirty and there's some needles and feces and trash,' Musk begin in an interview with Garry Tan of Y Combinator. 'But then there's also this thousand-foot wall of water, which is a tsuami of AI.' 'How much does cleaning the beach really matter if you've got a thousand-foot tsumai about to hit? Not that much,' the Tesla CEO continued. 'Back to the main quest of building technology, which is what I like doing.' 'The signal to noise ratio in politics is terrible,' he added. .@elonmusk on DOGE: "Fixing the government is kind of like there's some needles, feces and trash, and you want to clean up the beach." "How much does cleaning the beach matter if you've got a thousand-foot AI tsunami about to hit?" — Josh Caplan (@joshdcaplan) June 19, 2025 On May 28th, Musk announced his departure from DOGE, concluding his 130-day tenure as a special government employee in the Trump administration. Later in the interview, Musk predicted that AI will drive an economy thousands or millions of times larger than today's size, if it doesn't wipe us out first. 'AI will so profoundly change the future, it's difficult to fathom how much. But, you know, the economy, assuming we don't, things don't go awry, and AI doesn't kill us all and itself, then you'll see ultimately an economy that is not, not ten times more than the current economy,' Musk said. 'Ultimately, if we become, say, or whatever our future machine descendants, or mostly machine descendants, become a Kardashev scale two civilization or beyond, we're talking about an economy that is thousands of times, maybe millions of times, bigger than the economy today.' Musk then mused how society is on the brink of digital superintelligence that could outsmart humans, predicting it might hit as soon as this year or next. 'I think we're quite close to digital superintelligence,' the billionaire said. 'It may happen this year and if it doesn't happen this year next, year for sure.' 🚨 BREAKING: Elon Musk says we're very close to Digital Super Intelligence. It may happen this year, and if it doesn't happen this year, next year for sure. A Digital Super Intelligence is defined as smarter than any human at anything. — DogeDesigner (@cb_doge) June 19, 2025 Musk's artificial intelligence startup, xAI, is reportedly seeking to raise $4.3 billion in equity financing This capital raise would complement a separate $5 billion debt financing effort for a combined entity encompassing xAI and X, the social media platform. The fundraising push follows a $6 billion cash injection xAI received in December, signaling the company's aggressive drive to bolster its AI capabilities amid intensifying industry competition.
