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- Morgan Stanley opens xAI books amid Musk-Trump feud
Morgan Stanley opens xAI books amid Musk-Trump feud
US-UAE AI Data Campus Deal Faces Delays Over Security Concerns
Algot Persson
June 07, 2025
In Today’s Issue:
Morgan Stanley opens xAI books amid Musk-Trump feud
US-UAE AI Data Campus Deal Faces Delays Over Security Concerns
Read time: 3 minutes
Morgan Stanley opens xAI books amid Musk-Trump feud
Despite current financial struggles, Morgan Stanley has begun pitching xAI Corp. to investors, projecting the Elon Musk-led startup will generate $13.1 billion in annual earnings by 2029. In Q1 2025, xAI posted $52 million in revenue and a $341 million EBITDA loss, with negative $220 million cash flow following $2.6 billion in capital expenditures. The company expects $1 billion in revenue by year-end and plans to spend $18 billion on data centers. The effort to raise debt comes as Musk’s public feud with Donald Trump escalates, complicating investor sentiment. A loan tied to Musk’s platform X dropped 1.25 points amid the dispute. Politico reports that a White House call is planned to de-escalate tensions. xAI and Morgan Stanley declined to comment. The financials shared with investors are unaudited.
US-UAE AI Data Campus Deal Faces Delays Over Security Concerns
A multi-billion-dollar deal to build one of the world’s largest AI data center hubs in the UAE remains unresolved due to U.S. national security concerns, sources told Reuters. The project, unveiled during President Trump’s May visit to Abu Dhabi, involves U.S. tech firms including Nvidia, OpenAI, Cisco, Oracle, and Japan’s SoftBank. The UAE’s G42 is funding it and aims to launch the first phase, Stargate UAE, in 2026 with 100,000 Nvidia AI chips. Despite Abu Dhabi’s pledge to align security standards with Washington, U.S. officials remain wary of the UAE’s ties to China and have yet to define export controls or enforcement mechanisms. The project could face restrictions on Chinese tech and personnel, with no clear timeline for finalization. Internal opposition exists within both Republican and Democratic ranks. G42 previously removed Chinese tech under U.S. pressure and accepted a $1.5B Microsoft investment. Still, concerns linger amid evidence of past Huawei use, AI chip smuggling, and Gulf links to sanction evasion. The proposed AI campus will ultimately host 5 gigawatts of data infrastructure, with “American-managed” cloud services across the region.
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