Musk kicks off xAI, Neuralink fundraises after DOGE farewell
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Billionaire Elon Musk is busy raising fresh funds for his new-age companies as he steps away from politics and turns his focus back to running his businesses. The richest person in the world recently bid adieu to the Department of Government Efficiency ( DOGE ) amid a widespread backlash and his supposed disillusionment with the current dispensation.Musk-owned xAI is looking to raise $5 billion, while Neuralink , also owned by him, has raised $650 million, according to reports. The former is vying to expand its footprint in the competitive artificial intelligence space, which is dominated by the likes of Microsoft, OpenAI and Google. The latter has started clinical trials for its brain implant devices.Musk's AI startup xAI Corp is looking to sell debt worth $5 billion. Morgan Stanley, the bank that advised him on his $44-billion Twitter acquisition, is shopping the debt at a double-digit interest rate, news agency Bloomberg reported.The debt package includes a floating-rate term loan, a fixed-rate term loan, and senior secured notes. The funds will be used for general corporate purposes, with commitments due by June 17.Early pricing discussions suggest a rate 7 percentage points above the benchmark for the floating-rate loan and around a 12% yield on the senior notes. The debt package has already seen strong investor demand, exceeding $3.5 billion.The debt is linked to XAI Holdings, which includes both xAI and Musk's social media platform X, which were merged in March via an all-stock deal valued at $33 billion. In April, Bloomberg reported that XAI Holdings was in talks to raise around $20 billion from investors.Musk is also selling $300 million in xAI stock through a secondary offering, eyeing a valuation of $113 billion, the Financial Times reported.Musk has been investing heavily in AI infrastructure, including xAI's Colossus supercomputer and a data centre in Memphis. The funds raised in the latest rounds could be used to finance these facilities.On Monday, Neuralink, which makes brain implant chips to process and transmit neural signals, raised $650 million in a fresh funding round. ARK Invest, DFJ Growth, Founders Fund, G42, Human Capital, Lightspeed, QIA, Sequoia Capital, Thrive Capital, Valor Equity Partners and Vy Capital participated in the round.Last month, a Semafor report said that the company had raised $600 million at a valuation of $9 billion. The company had previously raised $280 million in a funding round led by Peter Thiel's Founders Fund.Neuralink's brain chip is meant to help people with disabilities carry out day-to-day tasks by transmitting neural signals to computers and smartphones. In early tests, the implant has allowed the first patient to play video games, browse the internet, post on social media and move a cursor on his laptop directly with his brain.The company claims that five patients with severe paralysis are using Neuralink to control digital and physical devices with their thoughts. The company received a 'breakthrough' tag for its speech restoration device last month and vision-restoring device last year from the US Food and Drug Administration.Moving forward with his plans to make X, formerly Twitter, into an 'everything app', Musk announced the rollout of the XChat direct message service on the platform.The new messaging feature is built on Rust with Bitcoin-style encryption, disappearing messages, cross-platform audio and video calls, and native filesharing capabilities.The Bitcoin-style encryption likely refers to elliptic curve cryptography (ECC), where each user has a secret private key and a public key. Messages are encrypted using the public key and can only be decrypted by the private key.Electric vehicle (EV) major Tesla is not keen on manufacturing in India, union heavy industries minister HD Kumaraswamy said on Monday. The company had recently selected showroom space in Mumbai and even posted job offers in the country.But the electric carmaker is yet to take any concrete steps towards setting up manufacturing facilities in India.Kumarawswamy's remark came as India plans to invite formal applications under its new flagship EV policy, Scheme to Promote Manufacturing of Electric Passenger Cars in India.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
an hour ago
- Mint
India Warming to Larger Private Credit Deals, Cerberus Says
(Bloomberg) -- The market is warming to large private credit deals in India, where local borrowers are typically less levered than their peers in the rest of Asia, according to Indranil Ghosh, managing director and head of pan-Asia special situations at Cerberus Capital Management. Cerberus, which has $65 billion under management globally, was among the anchor investors in Shapoorji Pallonji Group's $3.4 billion financing, the country's largest private credit deal to date. While deals of that scale are still a rarity, growing capital needs and relatively low leverage are building lenders' confidence in financing larger Indian deals, Ghosh said. Deals this year are already picking up. KKR Inc. inked its largest ever credit investment in India with a $600 million financing for conglomerate Manipal Group. And Indian clean energy producer Greenko Energy Holdings signed a $650 million private credit deal to buy back a stake in the company. Even three years ago, seeing multiple Indian deals larger than $100 million would've been unthinkable, Ghosh said. 'We expect this trend to continue as Indian companies have significant capital needs,' said Ghosh. A major draw for global investors like Cerberus has been Indian companies' balance sheets. On average the loan-to-value ratio among Indian private credit borrowers, which measures the size of a financing against its collateral, is about 40%, Ghosh said. 'In the rest of Asia, and even in developed markets, the gauge would be over 60%,' he added. Lower ratios give investors confidence they'll be repaid if borrowers are required to sell assets. Shapoorji's deal, for instance, closed at a loan-to-value ratio of about 16%, one of the key factors that attracted global lenders like Ares Management Corp and Farallon Capital Management. Despite the market's growth, deal sizes in India, and Asia more broadly, still pale in comparison to more established private credit markets in the US and Europe. The region only accounts for about 7% of the global market, according to a March PwC report, and lenders still tend to focus on smaller, higher-yielding or distressed deals. A rush of new local private credit funds setting up shop in India see this as an opportunity. Motilal Oswal Financial Services is opening its first private credit fund, and Kotak Alternate Asset Managers Ltd. has plans to raise as much as $2 billion, targeting returns between 18% and 20%. Even the government is piling in — with India's quasi-sovereign fund, the National Investment & Infrastructure Fund, planning to raise as much as $2 billion in its latest private credit fund, backed by global investors including the Abu Dhabi Investment Authority. The Trump administration's tariffs could also be a tailwind for India, as several asset allocators are 'increasingly exploring ways to diversify' into other parts of the global economy, said Ghosh. Ghosh said he could see some asset quality issues for small- and mid-sized corporates with cyclical businesses or governance issues, but he does not anticipate any imminent large-scale defaults in Indian private credit. That's because most of the larger deals are backed by high-quality sponsors with strong assets and access to multiple sources of liquidity, he said. 'Indian large and mid-sized companies have significantly raised their governance standards when compared to 10 years ago,' he said. But when deals do go south, the avenues for resolution in India can be a deterrent to global capital. India technically limits corporate insolvency proceedings to 330 days, but the courts and lenders have grappled with perennial delays. Improving those mechanisms is a requirement for many global investors still on the sidelines, who 'dislike lingering debt resolution processes,' Ghosh said. More stories like this are available on
Mint
2 hours ago
- Mint
Tesla is in disarray. Musk has already moved beyond caring about cars.
The Cybertruck, Tesla's only new model in the past five years, has logged disappointing sales. Tesla sales are in a deep funk. Elon Musk insists he doesn't care. The electric-car pioneer is stuck in one of its worst sales streaks, with the company reporting Wednesday that global vehicle sales fell 13.5% in the second quarter, compared with a year ago. Vehicle deliveries also dropped 13% in the first quarter. Rivals from General Motors to China's BYD, in the meantime, have churned out high-tech vehicles, stealing market share. And Congress is preparing to pull the plug on U.S. tax credits for electric vehicles—at a time when consumers are shifting back to buying traditional cars. 'I'd encourage people to look beyond the bumps and potholes of the road immediately ahead of us," Musk told investors in April. 'Lift your gaze to the bright shining citadel on the hill." Up on that hill is Musk's promise of self-driving taxis and humanoid robots. Even though three-quarters of Tesla's roughly $100 billion in revenue in 2024 came from selling cars, Musk has been telling investors that he has shifted his focus to transforming the company with autonomous vehicles and robots. Last year, Musk froze work on a new affordable model, dubbed the Model 2, which was supposed to cost $25,000. Asked by an investor when Tesla might revive that model, Musk said the company was focused on building a version of that car, called the Cybercab, without steering wheels or pedals. 'I think having a regular $25,000 model is pointless. It would be silly, like it will be completely at odds with what we believe," Musk said. The stainless steel Cybertruck, which hasn't sold well, is the only new Tesla model in the last five years. Earlier this year, executives said they were focused on reducing prices of its current lineup. 'Monthly payment is the biggest differentiator for our vehicles," Lars Moravy, vice president of vehicle engineering, said in April. Investors are betting on Musk's vision, propping up a stock market valuation of nearly $1 trillion based on his promises. Many Wall Street analysts say the car business is worth less than $100 a share, or a third of Tesla's roughly $300 share price. 'Most investors value Tesla's core auto business at between $50 and $100/share," Morgan Stanley analyst Adam Jonas wrote in a May research note. Despite Musk's evangelism about the promise of Tesla's growth, the engine driving that transformation is a car business that is currently sputtering. Tesla's profit fell 71% in the first quarter, and it only managed a $409 million profit because the company sold $595 million in regulatory credits to other carmakers. When it reports second-quarter earnings on July 23, analysts expect a roughly 10% decline in sales and a profit drop of nearly 20%. Tesla CEO Elon Musk and President Trump touted Tesla models outside the White House in March. The problems with the car business have deepened this year, even after Musk said he was leaving the White House to spend more time on Tesla. Trade disputes have created uncertainty over the availability of rare-earth minerals from China needed to build EVs and complicated Tesla's local supply chain, which relies on parts from Canada and Mexico. And consumer demand for EVs has eroded. Overall EV sales in the U.S. fell around 7% in the second quarter, according to Cox Automotive estimates. Ford, Hyundai and Kia on Tuesday all reported steep drops in EV sales, though GM sales jumped after it released an electric Cadillac Escalade and Chevrolet Equinox EV. The Tesla brand has been affected in part by Musk's political activities, which have angered customers across the political spectrum. The Tesla CEO stepped aside from his role overseeing cost-cutting efforts at the Department of Government Efficiency at the end of May—around the time that Tesla board members reached out to executive search firms and some pressed the longtime leader to spend more time at the company, the Journal reported. Tesla chair Robyn Denholm later said the board had confidence in Musk and its growth plan. The world's richest man hasn't been able to stay out of politics, after spending nearly $300 million to help get President Trump elected. He has twice feuded with Trump on social media in recent weeks, sparring over the Republican's signature 'big, beautiful bill."Musk criticized the legislation this week, saying it was fiscally irresponsible and threatening to start a new political party to challenge congressional Republicans who vote for it. Trump responded with his own threats to use the power of the federal government to punish his former adviser. On Tuesday, Trump told reporters, 'We might have to put DOGE on Elon," and, when asked, said he would consider deporting Musk, a naturalized U.S. citizen who was born in South Africa. There also has been turmoil in Tesla's executive ranks this year. Last week, Tesla parted ways with Omead Afshar, a key lieutenant and confidant of Musk. Afshar had overseen sales and manufacturing in North America and Europe since last fall. He will be replaced in part by Tom Zhu, who had previously relocated to China to help the company catch up with the competition in Asia. A few weeks earlier, Tesla lost the head of its Optimus robot program, Milan Kovac, who said he stepped down so he could spend more time with his family overseas. Musk, meanwhile, has been focused on the rollout of a robotaxi service in Austin, Texas. On June 22, the day of the launch, he was pictured celebrating with the robotaxi team around a conference table covered with pizza boxes and Diet Coke. Unlike with Tesla's EV business, Musk isn't the pioneer on self-driving cars and is seeking to catch up to Alphabet's Waymo, which already has hundreds of robotaxis operating in multiple cities. Musk has said the program could one day add $5 trillion to $10 trillion to Tesla's market cap. Last week the company showed off another new trick when the first Model Y autonomously delivered itself from Tesla's Austin factory to a customer's home about 30 minutes away. The Tesla boss said he expects there to be hundreds of thousands of Teslas driving fully autonomously on roads in the U.S. by the end of 2026, many of which would be personally owned vehicles. In his vision, drivers will one day be able to lease their cars to other riders on the robotaxi network, much like Uber or Airbnb. The vision was on full display in Tesla's recent impact report, in which the company demonstrated a Richard Scarry-esque town where autonomous vehicles zipped around a solar-powered city, and Optimus robots pushed children in strollers and helped people carry the groceries. One image showed a robot watering a house plant while a family plays games in the living room. Inside the report was a new promise for how robotaxis and Optmius fit into Tesla's mission: 'We believe autonomy will save lives, time and money while improving quality of life for everyone." A photo from the Tesla Impact Report shows an Optimus robot watering houseplants. Write to Becky Peterson at and Sean McLain at
Mint
2 hours ago
- Mint
Gold Eases After Three-Day Rally Ahead of Fed-Watched Jobs Data
(Bloomberg) -- Gold eased after a three-day gain, before pivotal US jobs data due later Thursday that may shape the outlook for the Federal Reserve's monetary easing path. Bullion traded near $3,345 an ounce after gaining more than 2% earlier this week, as markets shifted focus to the incoming payrolls report that's forecast to show 106,000 jobs were added to the economy in June, which would mark the fewest in four months. Separate data from ADP Research on Wednesday showed employment at US companies fell for the first time in over two years, prompting traders to boost bets on at least two rate cuts before 2026. A pronounced deterioration in the labor market could pressure officials to cut interest rates as early as this month, even as Fed Chair Jerome Powell has highlighted labor market resilience and underscored a 'wait-and-see' approach to assess the impact of tariffs on inflation. Lower borrowing costs tend to benefit gold, as it doesn't pay interest. Gold is up by more than a quarter this year, trading around $150 short of a record set in April. The precious metal has been bolstered by demand for havens as investors grapple with heightened geopolitical and trade tensions. The rally has also been supported by robust central-bank purchases, as well as inflows into bullion-backed exchange-traded funds. Meanwhile, there are lingering concerns about the US deficit, with President Donald Trump's sweeping tax and spending bill expected to add an estimated $3.4 trillion to the nation's debt over a decade. Should the legislation before the House be approved, gold's haven appeal could be boosted. Investors also continued to monitor progress in US trade negotiations, after Trump said he reached a deal with Vietnam. As his July 9 deadline for higher tariffs approaches, there are signs investors are becoming increasingly less worried by the president's unpredictable stance on levies given the economy appears resilient for now. Spot gold was down 0.4% to $3,345.86 an ounce as of 8:28 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat, down 0.6% so far this week. Silver, palladium and platinum all fell. More stories like this are available on
