Saudi Fund Helped Refinance X Debt On Eve Of Musk Visit
On Monday in Riyadh, at the Saudi-U.S. Investment Forum, Elon Musk announced during a fireside chat with the Kingdom's minister of communications and information technology that Starlink, the satellite internet arm of his rocket company SpaceX, had clinched a deal with Saudi Arabia to offer service to the country's maritime and aviation companies.
It was the second Musk venture to do a deal with the Saudis in as many weeks. On April 29, X Corp., Musk's social media company, raised $1.23 billion in fresh debt to refinance part of its existing $12 billion debt load from Musk's leveraged buyout three years ago. One of the firms helping to refinance X's debt was Kingdom Holding Company, the investment firm chaired by Saudi billionaire Prince Alwaleed Bin Talal Alsaud, according to PitchBook. It is not clear how much of the $1.23 billion was financed by Kingdom Holding. A spokesperson for Kingdom Holding declined to comment. X Corp. did not respond to a request for comment. The Saudi company's involvement in the refinancing deal has not previously been reported on.
Kingdom Holding has good reasons to help X manage its debt load. The firm is one of the larger minority investors in Musk's xAI Holdings, the recently formed entity that includes X and xAI, Musk's artificial intelligence startup. The Saudi firm rolled over its existing Twitter investment when Musk took the social media platform private in 2022, and then participated in xAI's two $6 billion funding rounds last May and last November. A few days ago, Prince Alwaleed tweeted an AI-generated image of himself watching a chess match between Musk and Trump.
Things weren't always so harmonious between Musk and the Saudis. The Kingdom's sovereign wealth fund, PIF, had built a stake in Tesla of nearly 5% in 2018, before Musk falsely tweeted that he had funding secured from the Saudis to take the automaker private. The S.E.C. sued Musk, and Musk said he would 'probably not' take money from the Saudis again following the murder of journalist and Saudi dissident Jamal Khashoggi. The Saudis then reportedly sold off most of their Tesla shares in 2020.
The change in tune from both parties reflects a broader embrace of Musk by Gulf investors as the world's richest man has cemented his global influence and political power as one of Donald Trump's closest advisors during his second administration. Plus there is Musk's willingness to tap foreign capital to help finance his growing empire of privately held startups. In addition to receiving backing from the Saudis, Musk has tapped sovereign wealth funds and state-affiliated companies in Qatar, Oman, Kuwait, and the U.A.E. over the past year for investments and new deals, including fundraising for xAI, his artificial intelligence startup that aims to compete with OpenAI.
Qatar, which is making headlines for its gift of a $400 million airplane to Trump, was early to the Musk party. Its over-$500 billion sovereign wealth fund, the Qatar Investment Authority, invested $375 million in Musk's Twitter buyout in 2022. In the last year, the petrostate (population: 3 million) has broadened its embrace. Last summer it opened its first Tesla store and showroom. In October, state-owned Qatar Airways introduced a partnership with Musk's satellite internet provider Starlink to bring wi-fi aboard its commercial airliners. In November, shortly after Trump's election, the sovereign wealth fund invested in xAI's $6 billion fundraising round. In January, the fund announced it would pay Nova Sky Stories, a drone light show company owned by Elon Musk's brother Kimbal, an undisclosed amount to conduct light shows across the country for the next two years.
Oman and Kuwait are also backers of Musk's xAI. The Oman Investment Authority, a $50 billion sovereign wealth fund, invested undisclosed amounts in both of xAI's two $6 billion fundraising rounds last year. The Kuwait Investment Authority, a state-backed investment fund with $1 trillion in assets, invested an undisclosed amount in xAI's November fundraising round.
The United Arab Emirates and its various state-backed funds do not appear to have backed xAI. However, Alpha Dhabi Holding, an investment holding company with ties to the Abu Dhabi ruling dynasty, invested in SpaceX in May 2022. More recently in February, the U.A.E, announced that Musk's tunnel startup The Boring Company would be building one of its underground loops in Dubai for an undisclosed cost. '[It] is gonna cover Dubai's most densely populated area for people to go for point to point in a seamless manner,' said the U.A.E.'s minister of artificial intelligence in a taped panel discussion in February. The Boring Company's only existing tunnel, in which Teslas ferry people around a conference center in Las Vegas, is beset by trespassers and minimal traffic.
Musk is apparently hopeful that the Saudis will also give The Boring Company fresh contracts. During his fireside chat on Monday, when asked about xAI, Musk brought up his company: 'I should mention also, something worth considering is tunnels,' he said. 'I have this company called The Boring Company, which sounds kind of boring, but it literally bores tunnels.'
Not surprisingly, all of these business dealings combined with Musk's influence with Donald Trump as his informal advisor and as head of DOGE, pose plenty of concerns about conflicts of interest, according to experts. 'It's nearly impossible to leave certain biases at the door and therefore any advice offered by Musk has to be considered based on his business entanglements,' says Scott Amey, general counsel of the Project On Government Oversight, a think tank based in Washington, D.C. 'This is why we have ethics standards and cooling off periods for government officials. Ignoring those safeguards will result in benefits for those connected and not the public.' Perhaps that is just how Musk wants it.
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