Nvidia Backs Elon Musk’s xAI with $2 Billion Investment in $20 Billion Deal

Elon Musk's artificial intelligence venture xAI is securing $20 billion in a landmark funding round, far exceeding initial estimates. The financing package combines $7.5 billion in equity with $12.5 billion in debt arranged through innovative structures.

Nvidia emerges as a strategic partner, committing $2 billion in equity while facilitating processor acquisitions through a specialized vehicle. The chipmaker's involvement accelerates development of xAI's Colossus 2 data center in Memphis, with a five-year chip leasing agreement in place.

Apollo Global Management and Diameter Capital Partners anchor the debt portion, while Valor Capital leads equity investors. This capital infusion follows xAI's reported $1 billion monthly burn rate and a $10 billion raise earlier this year.