Elon Musk’s AI venture xAI is preparing a $20 billion financing round, bolstered by a $2 billion equity investment from Nvidia, Bloomberg News reported. The deal, which blends equity and debt, will fund the purchase of Nvidia GPUs for xAI’s next major computing hub, Colossus 2.
According to the report, xAI’s financing is structured through a special purpose vehicle (SPV) to acquire Nvidia processors, splitting the funds between $7.5 billion in equity and up to $12.5 billion in debt. Nvidia declined to comment, and xAI has not yet issued a statement.
The partnership underscores the growing interdependence between AI model developers and the companies that produce the hardware running them. For Nvidia, this adds another heavyweight client in a market already defined by unprecedented GPU demand. For Musk’s xAI, it represents the capital and computing power needed to rival giants like OpenAI.
Last month, Musk rebuffed claims that xAI was raising $10 billion at a $200 billion valuation, though he acknowledged upcoming capital efforts. Founded in July 2023, xAI positions itself as a challenger to ChatGPT, with ambitions to advance human-like reasoning in AI systems.
