This is big, first they invested in Intel (probably alternative for TSMC) and now -
Elon Musk’s AI startup xAI is raising more money than first planned, bringing in backers including NVIDIA to lift its ongoing funding round to $20 billion, according to people familiar with the matter, Bloomberg reports. The financing includes equity and debt in a special purpose vehicle (SPV) that will buy NVIDIA processors and rent them to xAI for use in its Colossus 2 project, the people said. That’s the name of its largest data center site, located in Memphis. NVIDIA is putting in as much as $2 billion in the equity portion of the deal, a strategy by the chipmaker that helps speed up its customers’ AI investments. However, NVIDIA representatives declined to comment while an xAI spokesperson didn’t respond to a request for comment from Bloomberg. Musk posted on X in September that the company was “not raising any capital right now.”
Musk’s xAI financing would split between about $7.5 billion of equity and as much as $12.5 billion of debt in the SPV, the people said. The vehicle will be used to buy NVIDIA processors, and Musk’s AI startup would then rent the chips out for five years, letting Wall Street financiers get their money back.