Elon Musk's AI startup, xAI, is raising more capital than initially anticipated, with the funding round now approaching $20 billion, Bloomberg News reported on Tuesday, citing sources familiar with the matter, reports Reuters.
As part of the deal, Nvidia is reportedly investing up to $2 billion in the equity portion, with the entire financing package consisting of both equity and debt. The funding will be used to acquire Nvidia's graphics processing units (GPUs) for xAI's Colossus 2 data center.
The financing is structured with about $7.5 billion in equity and up to $12.5 billion in debt, organized through a special purpose vehicle aimed at purchasing Nvidia processors.
Neither Nvidia nor xAI immediately responded to requests for comment.
In September, Musk denied a CNBC report that xAI was raising $10 billion at a $200 billion post-money valuation, clarifying that xAI would raise capital in the coming months but not immediately.
Launched in July 2023, xAI was created by Musk as an alternative to OpenAI’s ChatGPT, positioning it as a new player in the competitive AI landscape.
Bd-pratidin English/ Jisan
