Elon Musk’s artificial intelligence startup xAI is expanding its fundraising efforts to about $20 billion, with Nvidia set to contribute up to $2 billion in equity, according to people familiar with the deal.
Headline earlier:
More now:
The financing package combines roughly $7.5 billion in equity and as much as $12.5 billion in debt, much of it tied to Nvidia’s GPUs for xAI’s planned Colossus 2 data centre in Memphis. The deal is being structured through a special purpose vehicle (SPV) that will purchase Nvidia chips and lease them back to xAI over five years, allowing lenders to recover funds through the hardware rather than depending on the company’s credit.
This GPU-backed structure, supported by Apollo Global Management, Diameter Capital Partners, and Valor Capital, could serve as a new model for reducing lender exposure in capital-intensive AI ventures. Apollo is taking part in both the debt and equity tranches.
Neither Nvidia nor xAI has publicly commented on the financing, and Musk — who said as recently as September that xAI was “not raising any capital right now” — has yet to address the latest developments.
