June 2 (Reuters) - Morgan Stanley ( MS ) is shopping a

$5 billion debt package for Elon Musk's xAI and the artificial

intelligence company is seeking a valuation of $113 billion in a

share sale worth $300 million, according to media reports on

Monday.

The debt sale, launched Monday, includes a term loan B, a

fixed-rate term loan and senior secured notes, Bloomberg News

reported, citing a person familiar with the matter, and added

that the proceeds will go towards general corporate purposes.

Commitments are due on June 17.

The share sale would allow employees to sell shares to

investors and a larger investment round is expected to follow

the secondary stock offer, in which xAI will offer new equity to

outside investors, the Financial Times had reported earlier on

Monday, citing people close to the situation.

The AI startup acquired X, Musk's social media business, in

March.

The deal valued xAI at $80 billion and the social media

platform X - formerly known as Twitter - at $33 billion, Musk

had said then.

XAI did not immediately respond to a Reuters request for

comment on the reports.

Musk recently stepped back from the Trump administration

after the Tesla CEO ended a chaotic four-month stint

leading the administration's sweeping cost-cutting campaign at

the Department of Government Efficiency. U.S. President Donald

Trump, however, said Musk would remain a close adviser.

During Tesla's earnings call in April, Musk had said he

would refocus his attention on the EV maker.

XAI was launched less than two years ago and was in talks

with investors to raise roughly $20 billion in funding for the

combined AI startup and social media business, Bloomberg News

reported in April.