Nvidia to Invest $2B in Musk’s xAI $20B Funding Round

Elon Musk's artificial intelligence startup xAI is orchestrating a $20 billion funding round, with Nvidia committing up to $2 billion in equity. The unique financing structure involves a special purpose vehicle (SPV) that will purchase Nvidia GPUs, which xAI will lease for its Colossus 2 data center project. Critics highlight the circularity of Nvidia both investing and supplying hardware.

xAI's Grok AI model positions itself against industry giants like OpenAI's ChatGPT and Google's Gemini. The expanded $20 billion raise—double the initial target—will fund infrastructure development, with Apollo Global Management and Diameter among backers. Nvidia's dual role as investor and supplier underscores the strategic value of AI hardware in this high-stakes financing.