Elon Musk's xAI Expands Funding Round to $20 Billion

xAI, the artificial intelligence startup founded by Elon Musk, is reportedly expanding its current funding round to US$20 billion, according to Bloomberg sources.

The financing round includes both equity and debt, with Nvidia investing up to US$2 billion in equity. The funds will primarily be used to acquire Nvidia GPUs for xAI’s advanced data center, Colossus 2, located in Memphis, Tennessee.

The deal is structured through a special purpose vehicle (SPV) that will purchase the GPUs and lease them to xAI over a five-year term. This innovative approach allows the debt to be backed by tangible hardware assets, rather than the company’s equity — reducing financial risk while enabling large-scale infrastructure expansion.

Key Highlights

xAI expands funding round to $20B with Nvidia investing $2B
Funds to support GPU purchases for Colossus 2 data center
Backed by Valor Capital, Apollo Global, and Diameter Capital

Major institutional investors such as Apollo Global Management and Diameter Capital Partners are reportedly part of the round, while Valor Capital is leading the equity portion. The move underscores growing investor confidence in Musk’s AI ambitions, particularly as xAI continues to compete with industry leaders like OpenAI, Anthropic, and Google DeepMind.

Also Read: Nvidia Assures Clients Amid $100B OpenAI Partnership

Despite already raising US$10 billion in equity and debt earlier this year, xAI is reportedly spending about US$1 billion per month, largely on GPU procurement and training its advanced AI models. The funding expansion aims to solidify xAI’s infrastructure and accelerate its next phase of AI innovation.