Elon Musk's xAi is increasing the yield it is offering on a $5 billion debt raise led by Morgan Stanley, a source with knowledge of the matter said on Friday.

The package now includes $3 billion of bonds with a 12.5% yield, a $1 billion fixed-rate term loan with a 12.5% interest rate and a $1 billion term loan B priced at 7.25 percentage points over the benchmark rate at a discount of 96 cents on the dollar,

Elon Musk's xAI company is looking to raise $4.3 billion in equity funding, adding onto the $5 billion it's seeking in debt funding.