Key Takeaways

• Telegram and xAI have agreed in principle to a $300 million deal involving chatbot Grok but have not signed formal paperwork.

• The deal includes cash, equity, and a 50% revenue share from xAI subscriptions on Telegram.

• Elon Musk clarified that no official agreement is in place yet, which was confirmed by Pavel Durov.

• Telegram is also raising $1.5 billion via a five-year bond backed by BlackRock, Mubadala, and Citadel.

• Proceeds from the bond will be used to repurchase earlier debt and improve Telegram’s financial health.

• Toncoin saw wild price swings, driven by mixed signals regarding the xAI partnership.

The Telegram–xAI Partnership

On May 28th, Telegram founder Pavel Durov posted on X that Telegram users would soon have access to xAI’s generative AI chatbot, Grok, by the summer of 2025.

Pavel Announcing The Supposed Partnership

Source: X (@durov)

Durov claimed this integration would bring “the best AI technology on the market” to Telegram’s user base and described a one-year partnership between the two companies.

He further elaborated that the deal would provide Telegram with:

• $300 million in cash and equity from xAI.
• 50% revenue share from all xAI subscriptions sold through Telegram.

Deal Still Unfinalized

However, just hours after Durov’s post, Elon Musk chimed in via a comment, clarifying that no formal paperwork had been signed yet.

Interestingly, Durov responded in agreement, stating that while the deal had been agreed to “in principle,” official terms and legal formalities are still pending. Naturally, this discrepancy between the public announcement and the actual status of the deal has sparked concern among investors.

Details Of The Bond Issuance

While the xAI deal garnered headlines, Telegram is simultaneously pursuing a much larger financial initiative: a $1.5 billion bond offering.

This five-year bond, reported by The Wall Street Journal, is designed to help the company manage its existing debt obligations and strengthen its financial footing.

Key highlights of the bond offering include:

• BlackRock, Mubadala (Abu Dhabi’s sovereign wealth fund), and Citadel as backers.

• A yield price of 9%.

• Investors being given the option to convert debt into shares at a discount if Telegram goes public.

• Funds being used to buy back 2021 bonds maturing in March 2026. Telegram has already repurchased a portion of those using $400 million in cash.

What’s At Stake?

Telegram’s move to raise such a large sum suggests it is under significant financial pressure. Pavel has previously stated that he’s a fan of the concept of decentralization, but has reservations as to whether its truly achievable in the way it should be.

Pavel’s Thoughts On Decentralization

Source: X (@durov)

Although Durov has previously stated the company is near cash flow break-even, the bond offering and partnership announcements hint at a more complex picture.

Ripple Effect on Toncoin

Toncoin’s Surge & Slide

Toncoin (TON) experienced volatile price action in the wake of Durov’s announcement.

• TON initially jumped 23%, rising from $2.98 to $3.69 following Durov’s initial post.

• Musk’s correction that no formal deal existed caused a quick 11% decline, pushing the token down to $3.27.

This fluctuation underscores how sensitive investor sentiment is to developments involving major tech figures and platforms, especially when involving high-stakes financial arrangements.

FAQ

Is the deal finalized?

No. While both parties have agreed in principle, no legal documents have been signed yet. Elon Musk and Pavel Durov have both confirmed this.

Why is Telegram raising $1.5 billion through bonds?

Telegram plans to use the bond proceeds to repurchase existing debt from 2021 and stabilize its financial position.

What happened to Toncoin after the deal announcement?

Toncoin initially surged 23% following the announcement of the partnership. However, when Musk clarified the deal was not finalized, the coin dropped 11% within hours.

Who is backing Telegram’s bond issuance?

Major financial institutions like BlackRock, Mubadala, and Citadel are supporting the offering. BlackRock and Mubadala are existing investors, while Citadel is a new entrant.

Will Telegram go public soon?

While there is no confirmed date, the bond offering’s structure, allowing investors to convert debt to shares, suggests a potential IPO in the near future.