Elon Musk’s artificial intelligence venture, xAI, is pursuing one of its most ambitious financing efforts yet, quietly reshaping how major players fund the AI arms race.
People familiar with the matter say xAI is working with Wall Street financiers and technology partners to expand its latest funding round to the tune of $20 billion, reports Bloomberg.
Sources say the funding would be split between roughly $7.5 billion in equity and up to $12.5 billion in debt in a special purpose vehicle (SPV), which will acquire Nvidia’s high-end processors and lease them back to xAI for use in its Colossus 2 data center in Memphis.
The hybrid structure, combining equity and debt, would allow investors to recover their capital through GPU rental fees instead of relying on xAI’s broader balance sheet.
Nvidia is committing up to $2 billion in equity to the deal, while private equity groups including Apollo Global Management and Diameter Capital Partners are contributing to the debt portion, say people with direct knowledge of the matter.
For Musk, the funding push represents a critical step toward scaling compute infrastructure. xAI’s Colossus 2 complex is intended to anchor its model-training capacity over the next several years. The company has already raised about $10 billion this year and is reportedly burning through roughly $1 billion each month, relying on Musk’s network of companies, including SpaceX and potentially Tesla, for additional capital.
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