Elon Musk's xAI Seeks $12 Billion for Massive AI Infrastructure Expansion

Musk's xAI working to raise up to $12 billion, WSJ reports

July 22 (Reuters) - Elon Musk's artificial intelligence startup xAI is working with a financier to secure up to $12 billion more for its expansion plans, the Wall Street Journal reported on Tuesday, citing people familiar with the situation. Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital, according to the report. The money would be used to buy a massive supply of advanced Nvidia (NVDA.O), opens new tab chips that would be leased to xAI for a new massive data center meant to help train and power AI chatbot Grok, the WSJ reported. XAI and Valor Equity Partners did not immediately respond to Reuters' requests for comment. Reporting by Jaspreet Singh in Bengaluru; Editing by Anil D'Silva Our Standards: The Thomson Reuters Trust Principles., opens new tab

Musk's xAI to raise up to $12 billion in debt for AI expansion, WSJ reports

July 22 (Reuters) - Elon Musk's artificial intelligence startup xAI is working with a financier to secure up to $12 billion more for its expansion plans, the Wall Street Journal reported on Tuesday, citing people familiar with the situation. Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital, according to the report. The money would be used to buy a massive supply of advanced Nvidia (NVDA.O), opens new tab chips that would be leased to xAI for a new huge data center meant to help train and power its AI chatbot Grok, the WSJ reported. Valor and xAI did not immediately respond to Reuters' requests for comment. Some lenders want the debt to be repaid within three years and to cap the amount of money borrowed in order to limit their risk, the report said. Training and deploying advanced AI systems is expensive, requiring costly hardware, intensive compute and skilled engineers in a highly competitive market where rivals such as OpenAI, Google and China's DeepSeek are trying to dominate the technology. XAI is training Grok on 230,000 graphics processing units, including Nvidia's 30,000 GB200 AI chips, in a supercluster, with inference handled by the cloud providers, Musk said in a post on X on Tuesday. He added that another supercluster will soon launch with an initial batch of 550,000 GB200 and GB300 chips. The AI startup was expected to burn through about $13 billion over the course of 2025, according to media reports. Earlier this month, the Financial Times reported that xAI was in talks to raise more money in a deal that could value the AI startup between $170 billion and $200 billion. In response, Musk had said xAI was not seeking funding. "We have plenty of capital." Reporting by Jaspreet Singh in Bengaluru; Editing by Anil D'Silva and Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

Musk raises $12 billion for xAI's new data center

Elon Musk is raising more funds for his artificial intelligence startup, which is already burning through cash. This time, he needs up to $12 billion to build another massive data center. Musk's latest venture, xAI, which is best known for its chatbot Grok, has raised at least $20 billion so far in equity, venture capital, corporate debt, and sales of stock and debt. Included in that funding was a $2 billion investment from his own company SpaceX. Last year, xAI built Colossus, its first giant data center in Memphis, Tennessee. It currently houses 200,000 graphics processing units, or GPUs, making it one of the world's largest clusters of AI chips. Now Musk is turning to private-equity investors like Valor Equity Partners to raise $12 billion for its second data center, Colossus 2, the Wall Street Journal reported. Valor has a history investing in Musk-owned companies like SpaceX, Tesla, and the Boring Company. Musk hasn't had trouble raising funds from big hitters in the past. Some of xAI's high profile investors include Andreessen Horowitz, Sequoia Capital, and Nvidia. While xAI last fundraised at a $75 billion valuation, per Bloomberg, it is far from profitable and generates little revenue. The startup was projected to burn through about $13 billion in cash in 2025, according to projections shared with potential creditors, the Journal reported. Much like his AI chatbot, Musk's data center has been shrouded in controversy. In April, a coalition of environmental groups released a report claiming that xAI was running more than double the number of gas turbines than it had applied for, WREG Memphis reported. Memphis Mayor Paul Young told the news organization that the additional turbines were not being used, per his conversations with xAI leadership. Earlier this month, the environmental groups joined forces with civil rights group NAACP and filed a permit appeal to stop xAI from using gas-burning turbines to power its data center, NBC reported.

Musk's xAI working to raise up to $12 billion, WSJ reports - The Economic Times

Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital, according to the report.Elon Musk's artificial intelligence startup xAI is working with a financier to secure up to $12 billion more for its expansion plans, the Wall Street Journal reported on Tuesday, citing people familiar with the situation. Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with lenders to raise the capital, according to the report. The money would be used to buy a massive supply of advanced Nvidia chips that would be leased to xAI for a new massive data center meant to help train and power AI chatbot Grok, the WSJ reported. XAI and Valor Equity Partners did not immediately respond to Reuters' requests for comment.

Elon Musk's xAI Plans To Raise $12 Billion In Debt To Buy Nvidia Chips And Build One Of The World's Largest AI Superclusters: Report - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Elon Musk's artificial intelligence startup xAI is reportedly seeking to raise up to $12 billion in debt to fund a massive AI supercomputing infrastructure powered by Nvidia Corporation's NVDA chips. What Happened: xAI is working with Valor Equity Partners to line up financing from lenders, with the capital earmarked for purchasing high-end Nvidia GPUs, reported the Wall Street Journal, citing people familiar with the situation. The chips would be leased back to xAI to support its AI chatbot Grok and broader large language model training efforts. On Tuesday, Musk posted on X, formerly Twitter, that xAI is currently training Grok on 230,000 GPUs, including 30,000 Nvidia GB200 AI chips. He also revealed that a new supercluster with 550,000 GB200 and GB300 chips will soon be operational. See Also: Opendoor Stock Frenzy Continues -- Is $40 Per Share The Next Stop? In another post, he outlined xAI's plan to deploy 50 million units of H100-equivalent AI compute within five years. Why It's Important: Earlier this month, it was announced that Musk's xAI has raised $10 billion -- $5 billion in debt and $5 billion in strategic equity -- to expand its AI infrastructure. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started The latest funding talks come just weeks after the Financial Times reported xAI was exploring a new equity round that could value the company between $170 billion and $200 billion. At the time, Musk said xAI was not seeking capital, asserting, "We have plenty of capital." However, sources told WSJ the new financing may include lender-imposed conditions such as repayment within three years and borrowing caps to limit risk. xAI's ambitious plans signal intensifying competition in the global AI arms race, where rivals like OpenAI, Alphabet Inc.'s GOOG GOOGL Google and China's DeepSeek are also scaling up infrastructure. According to Benzinga's Edge Stock Rankings, Nvidia maintains strong upward momentum across short, medium and long-term timeframes. Additional performance details can be found here. Read Next: Nvidia's CEO Hits Beijing Like A Rockstar, Stirs Jensen-Mania In China Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: JRdes / Shutterstock.com GOOGAlphabet Inc$192.690.81%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum43.87Growth87.12Quality87.21Value50.79Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$191.850.92%NVDANVIDIA Corp$167.77-2.11%Market News and Data brought to you by Benzinga APIs