"Elon Musk's artificial intelligence startup xAI is raising more financing than initially planned, tapping backers including Nvidia Corp. to lift its ongoing funding round to $20 billion, according to people with knowledge of the matter. The financing includes equity and debt in a special purpose vehicle that will buy Nvidia processors and rent them to xAI for use in its Colossus 2 project, said the people, who asked not to be identified because the information is private."
"Nvidia is investing as much as $2 billion in the equity portion of the transaction, 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. A representative for Nvidia declined to comment. A spokesperson for xAI didn't respond to a request for comment. Musk posted on X in September that the company was not raising any capital right now."
xAI is expanding a funding round to about $20 billion, combining equity and debt via a special purpose vehicle that will buy Nvidia processors and rent them to xAI for use in Colossus 2, its largest data-center site in Memphis. Nvidia plans to invest up to $2 billion in the equity portion to help accelerate customer AI investments. The financing is expected to be split roughly $7.5 billion equity and up to $12.5 billion debt in the SPV. The SPV will acquire GPUs which xAI will lease for five years, allowing financiers to recoup their investment. Industry peers have secured comparable multibillion-dollar infrastructure financing.
Read at www.mercurynews.com
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