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, Bloomberg reported.
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.
That’s the name of its largest data center site, which is located in Memphis.
Nvidia is investing as much as $2 billion in the equity portion of the asset backed 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.
In an interview with CNBC Wednesday, Nvidia’s CEO Jensen Huang said when asked about Bloomberg’s reporting that the only regret he has about xAI and Musk is that he “didn’t give him more money.”
“Almost everything that Elon’s part of, you really want to be part of as well,” Huang said. “He gave us the opportunity to invest in xAI, and I’m just delighted by that.”
Musk posted on X in September that the company was “not raising any capital right now.”
The massive financing is just the latest for the AI industry, which has seen major tech companies invest tens of billions at a frenetic pace in order to build the infrastructure necessary to develop top AI models.
Earlier this week, OpenAI announced a deal to use Advanced Micro Devices Inc. chips over multiple years.
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