Nvidia to invest billions in Musk’s AI startup

Elon Musk’s artificial intelligence company xAI is close to securing $20 billion in funding, partly through major investments from Nvidia. 

Nvidia plans to invest up to $2 billion for an equity stake, with the funds to be used for purchasing chips for xAI’s massive data centre, Colossus 2, in Memphis, sources told Bloomberg.

The total financing package reportedly includes about $7.5 billion in equity and up to $12.5 billion in loans arranged through a special structure that will acquire Nvidia processors and lease them to xAI for five years. 

Other participants in the financing round include Apollo Global Management and Diameter Capital Partners. xAI already raised around $10 billion earlier this year, but continues to require substantial funding as it spends up to $1 billion per month. 

In September, Musk said the company was not raising capital, though he had previously invited Tesla shareholders to invest in xAI.

By Khagan Isayev