Free-electron lasers (FELs) produce short and very intense light pulses in the XUV and x-ray regimes. We investigate the possibility to drive Rabi oscillations in xenon with an intense FEL pulse by using the unusually large dipole strength of the giant-dipole resonance (GDR). The GDR decays within less than 30 as due to its position, which is above the 4d ionization threshold. We find that intensities around 1018 W/cm2 are required to induce Rabi oscillations with a period comparable to the lifetime. The pulse duration should not exceed 100 as because xenon will be fully ionized within a few lifetimes. Rabi oscillations reveal themselves also in the photoelectron spectrum in form of Autler-Townes splittings extending over several tens of electronvolt.