Elon Musk’s xAI raises $20 billion with $2 billion equity stake from Nvidia

Elon Musk’s artificial intelligence startup xAI has raised $20 billion in fresh financing, according to Bloomberg, with $2 billion of that amount coming directly from Nvidia as part of the equity ￰0￱ new round is larger than originally expected and is tied to xAI’s plan to use Nvidia processors for Colossus 2, its biggest data center located in ￰1￱ total package mixes equity and ￰2￱ show that about $7.5 billion is equity while as much as $12.5 billion comes in ￰3￱ deal is structured through a special purpose vehicle that buys Nvidia GPUs and rents them back to xAI for five years, giving financiers a path to recover their money without exposing themselves to company-level ￰4￱ has not commented on the transaction, while xAI also declined to ￰5￱ himself wrote on X in September that the company was “not raising any capital right now,” though this financing proves ￰6￱ invests while Wall Street funds the debt Nvidia is investing equity as a strategy to push its chips deeper into customer ￰7￱ company’s Chief Financial Officer Colette Kress told a Goldman Sachs conference in September that while Nvidia will continue to repurchase shares and pursue strategic deals, its main use of cash is to help other companies adopt AI more ￰8￱ financiers are backing the ￰9￱ Global Management is participating alongside Diameter Capital ￰10￱ Capital is leading the equity portion, with Apollo also ￰11￱ of these firms gave public comment when ￰12￱ raise is more than double the earlier $10 billion figure reported earlier this year, showing the scale of demand for hardware and financing in the AI ￰13￱ debt itself is unusual because it is backed by Nvidia’s processors instead of the ￰14￱ renting chips for a set period, xAI provides investors with predictable returns while keeping corporate liabilities ￰15￱ arrangement is being seen as a potential model for other tech firms aiming to secure capital without stacking too much debt directly on their ￰16￱ giants secure record amounts for infrastructure The deal comes in the middle of unprecedented capital raising across the AI ￰17￱ announced a multi‑year partnership to run its systems on Advanced Micro Devices ￰18￱ has agreed to a financing deal worth $29 billion for data center ￰19￱ pulled together $38 billion in debt for its infrastructure.

Altogether, tech companies in ￰20￱ markets have secured $157 billion so far this year, a 70% increase compared with last ￰21￱ Elon, this capital is ￰22￱ reported that xAI has already burned through $1 billion per month while building its ￰23￱ this year, the company raised about $10 billion in a mix of debt and ￰24￱ has also drawn on his other companies, with SpaceX already investing in ￰25￱ this year, Tesla investors will vote on whether to put money into the startup as ￰26￱ center capacity remains a central issue in AI development, as training large models requires huge computing ￰27￱ some in the industry debate how much more power will actually improve results, few argue against the need to secure hardware at ￰28￱ has positioned AI at the center of his product vision, describing it as the foundation for self‑driving vehicles and fully autonomous robots.

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