According to Golden Finance, recently, due to the ongoing tensions between Elon Musk and US President Donald Trump, the previously smooth financing process has been impacted. Morgan Stanley, as the financing lead for Musk’s artificial intelligence company xAI, has had to take measures to expand its investor base in order to promote the sales plan of raising $5 billion in bonds for xAI.
In the early stage of the transaction, the market showed high enthusiasm for the bond, with the subscription amount exceeding 3.5 billion US dollars. According to the trend at that time, the market generally expected that this bond issuance would be oversubscribed. However, as of this Monday, the subscription demand had only barely reached the target level of 5 billion US dollars. This change has plunged the originally seemingly smooth financing plan into a delicate situation.
To stabilize the progress of bond trading, Morgan Stanley had to start contacting small lending institutions that were not previously invited to participate. This action reflects from the side that investors’ attitudes towards Musk’s project have undergone subtle changes due to political factors. The deterioration of the relationship between Musk and Trump has undoubtedly added uncertainty to xAI’s financing path. Some investors who were originally interested in xAI bonds have begun to re-examine their investment decisions against the backdrop of the tense relationship between the two.
Previously, Musk and Trump had maintained a close relationship for a while, which had a positive impact on the development of xAI and related financing activities. However, recently, due to serious differences on some policy issues, the relationship between the two sides has taken a sudden turn for the worse. The two even engaged in a long-distance verbal battle on social media platforms. Trump threatened to terminate the government subsidies and contracts of the enterprises owned by Musk, while Musk supported the post impeaching Trump and claimed that it was time to establish a new political party that truly represented the centrist camp. This tense relationship has shaken the market’s expectations for the future development of Musk’s companies, which in turn has affected investors’ willingness to subscribe to xAI bonds.
It remains to be seen whether Morgan Stanley’s strategy of expanding its investor base this time can succeed and help xAI successfully complete a $5 billion bond financing. The market will closely monitor the progress of communication between Morgan Stanley and small lending institutions in the future, as well as the final subscription situation of xAI bonds by investors under the interference of political factors.
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