A clash unfolding online between Elon Musk and former President Donald Trump has spilled into the business world and is raising eyebrows on Wall Street.
As Musk and Trump traded barbs in real time on their respective platforms, XAI’s executive team was meeting with investors for a critical fundraising pitch hosted by Morgan Stanley.
Musk, who had united his social network X with his artificial intelligence venture earlier this year, is seeking to raise five billion dollars in debt for the company. There is also a plan to carry out a three hundred million dollar secondary sale.
Tensions between Musk and Trump reached a boiling point Thursday, injecting uncertainty just as xAI’s fundraising drive was hitting its stride.
The timing proved awkward.
Word surfaced that the price of the xAI debt was not holding steady. It was expected to trade at a hundred cents on the dollar, but on Thursday—it was spotted trading closer to ninety five cents.
Investor Anxiety Grows Amid Social Media Drama
Traders said this drop reflected mounting unease as Musk’s public spat with Trump played out at the very moment Morgan Stanley was working to drum up confidence.
The bank, according to investors, might need to sweeten the deal with better incentives to reassure anxious potential backers. This could include a higher interest rate on the debt, which would directly affect the cost of capital for Musk’s ambitions.
For Musk’s newly merged company, building trust with investors is crucial—especially with so much attention pivoting to its leadership and vision. Public drama between its most high-profile figure and one of the country’s most influential politicians creates an optics problem that is almost impossible to ignore.
On Thursday, as media outlets tracked every incendiary post fired off by Musk and Trump, XAI execs were left managing impressions and answering questions about stability.
An unusual pairing of business and social media theatrics made potential investors wary of betting on a company under the spotlight for its volatile founder.
The entire episode served as a reminder: in today’s business climate, reputational risks can move markets in a flash. Investors were left to weigh not only the numbers but also the turbulence that can stem from a CEO’s public persona, as seen in highly publicized crypto ETF agreements with digital companies like ETF agreements with digital companies and major transitions such as strategic company mergers in artificial intelligence.
