Elon Musk's xAI Secures $20 Billion Funding, Including $2 Billion from Nvidia

Musk's xAI nears $20 billion capital raise tied to Nvidia chips, Bloomberg News reports

Elon Musk's AI startup xAI is reportedly raising $20 billion, including a $2 billion equity investment from Nvidia. This financing, split between equity and debt, is intended to acquire Nvidia graphics processing units for xAI's data center. The funding round aims to support xAI's development as an alternative to ChatGPT. Elon Musk's AI startup xAI is raising more financing than initially planned, including an equity investment from Nvidia, to bring its ongoing funding round to $20 billion, Bloomberg News reported on Tuesday, citing people with knowledge of the matter. Nvidia is investing as much as $2 billion in the equity portion of the deal, Bloomberg reported, adding that the financing, which includes equity and debt, will be tied to the Nvidia graphics processing units that xAI plans to use in its data center Colossus 2. XAI's financing would be split between about $7.5 billion of equity and as much as $12.5 billion of debt, and is structured through a special purpose vehicle that will be used to buy Nvidia processors, the report said. Nvidia declined to comment, while xAI did not immediately respond to a request for comment. In September, Elon Musk denied a CNBC report that said xAI was raising $10 billion at a post-money valuation of $200 billion. Musk added that "xAI will of course raise capital in the coming months, just not right now." Musk launched xAI in July 2023 as an alternative to OpenAI's ChatGPT.

Nvidia Reportedly Bets $2 Billion On Elon Musk's xAI -- And Its Own GPUs Will Fuel 'Colossus 2' Gigawatt-Scale AI Supercluster - Apollo Asset Management (NYSE:APO), NVIDIA (NASDAQ:NVDA)

Jensen Huang-led Nvidia Corporation (NASDAQ:NVDA) is reportedly investing as much as $2 billion in Elon Musk's AI company and Grok-parent xAI. Jensen Huang Deepens Partnership With Elon Musk's AI Venture Nvidia's investment is part of xAI's ongoing funding efforts, which have grown beyond initial plans to reach $20 billion, according to Bloomberg, citing people with knowledge of the matter. xAI's funding is divided between $7.5 billion in equity and $12.5 billion in debt, the report said. This is structured through a special purpose vehicle. The funding will be used to purchase Nvidia's GPUs, which xAI plans to deploy at "Colossus 2," its AI data center in Memphis, Tennessee. Musk previously said that Colossus 2 will become the world's first Gigawatt AI training cluster. The funding also includes participation from Apollo Global Management (NYSE:APO), Diameter Capital Partners and Valor Capital, the report noted. xAI did not immediately respond to Benzinga's request for comments. Nvidia declined to comment. See Also: Tesla Robotaxi Downloads Outpace Uber By 40% On Apple's App Store Amid Ease Of Self-Driving Regulations Musk-Led xAI's Rapid Growth And Heavy Spending In July earlier this year, xAI secured $10 billion in debt and equity financing. In September, Musk denied reports that the startup was raising another $10 billion in funding at a valuation of $200 billion. However, as per the report, xAI burns through $1 billion per month, indicating that it requires funds to continue. Later this year, Musk's EV giant Tesla Inc. (NASDAQ:TSLA) shareholders will also vote on whether the automaker should invest directly in xAI. Price Action: Nvidia shares dropped 0.25% on Tuesday, reaching $184.04. In after-hours trading, it continues to drop, according to Benzinga Pro. Benzinga's Edge Stock Rankings place Nvidia's Growth in the 97th percentile and Quality in the 93rd percentile, highlighting its strong standing compared to leading AI peers such as TSMC and AMD. Read Next: Elon Musk's xAI Hires Trump Aide Stephen Miller's Wife Katie Amid Controversial Memphis Data Center Permit Win Photo: gguy/ Shutterstock APOApollo Asset Management, Inc.$126.05-0.51%OverviewNVDANVIDIA Corp$184.99-0.30%TSLATesla Inc$437.00-3.59%Market News and Data brought to you by Benzinga APIs

Nvidia to invest in Musk's xAI as part of $20 billion funding

The Elon Musk-backed artificial intelligence startup xAI is raising more financing than initially planned -- including an equity investment from Nvidia -- to bring its ongoing funding round to $20 billion, according to people with knowledge of the matter. The financing, which includes equity and debt, will be tied to the Nvidia graphics processing units that xAI plans to use in Colossus 2, said the people, who asked not to be identified because the information is private. That's the name of its largest data center site, which is in Memphis. Nvidia is investing as much as $2 billion in the equity portion of the deal, the people said, a strategy by the chipmaker that helps accelerate its customers' AI investments. XAI's fundraising effort, previously reported by Bloomberg at half the amount, may continue to grow.

Nvidia among investors in xAI's $20 bln capital raise- Bloomberg By Investing.com

Investing.com-- Elon Musk-backed artificial intelligence startup xAI increased a planned capital raise to as much as $20 billion, including an investment from NVIDIA Corporation (NASDAQ:NVDA), to procure more AI processors, Bloomberg reported on Tuesday. The financing is largely aimed at procuring more Nvidia chips that xAI plans to use in its upcoming Colossus 2 data center in Memphis, the report said. The capital raise includes equity and debt. Nvidia will invest as much as $2 billion in the equity portion of the deal, Bloomberg reported. The move is largely part of Nvidia's strategy to help accelerate its customers' AI investments, with the chipmaker having pledged about $100 billion to OpenAI last week. Previous reports said xAI was aiming to raise around $10 billion in its ongoing funding round. Other reports also valued xAI at $200 billion in September, making it among the most valuable startups in the world, behind OpenAI.