Nvidia and Top Investors Back Elon Musk’s xAI in $20 Billion Funding Push

The massive financing round, split between equity and debt, aims to power Musk’s Colossus 2 data center project and accelerate xAI’s race in next-generation artificial intelligence.

Elon Musk’s artificial intelligence venture, xAI, has raised an astonishing $20 billion in an ongoing funding round backed by a powerhouse roster of investors — including Nvidia, Apollo Global Management, and Valor Capital — according to a Bloomberg report.

The financing package, one of the largest AI-related raises to date, combines equity and debt through a special purpose vehicle (SPV) designed to purchase Nvidia’s high-performance chips and lease them back to xAI. The chips will be used to drive Colossus 2, xAI’s colossal Memphis-based data center project.

Sources told Bloomberg that Nvidia, led by CEO Jensen Huang, is investing up to $2 billion in equity, while Apollo and Diameter Capital Partners are leading the debt portion. Valor Capital heads the equity segment, and Apollo is also reportedly making a direct investment in xAI.

While Nvidia and the other parties declined to comment, insiders suggest the structure could serve as a blueprint for other companies looking to reduce debt exposure while maintaining aggressive AI investments.

Powering the Future of AI

xAI plans to divide the $20 billion raise into $7.5 billion in equity and $12.5 billion in debt within the SPV. The funds will be used to purchase Nvidia processors — the lifeblood of modern AI models — and lease them over a five-year period.

This approach reflects the growing financial engineering across the AI sector as companies race to secure computing power for large-scale infrastructure. From Meta’s $29 billion financing for data centers to Oracle’s $38 billion debt package, the competition for AI hardware and energy capacity is fierce.

At a recent Goldman Sachs conference, Nvidia CFO Colette Kress emphasized that the company plans to use its liquidity not just for stock buybacks or acquisitions but to help accelerate AI innovation across the industry.

Musk’s Expanding AI Empire

For Musk, the funding comes at a pivotal moment. Despite raising $10 billion earlier this year, xAI’s rapid expansion has reportedly driven monthly expenses to nearly $1 billion, highlighting the scale of its ambition.

The world’s richest man — with an estimated $484 billion net worth, per Forbes — has increasingly woven his AI pursuits into his broader empire. His other companies, including SpaceX and Tesla, have become integral to his long-term AI vision.

Tesla investors are expected to vote later this year on whether the automaker should invest directly in xAI — a move Musk argues is essential for developing fully autonomous vehicles and AI-driven robotics.

A Strategic Bet on the Next Frontier

As Musk pushes to make Colossus 2 one of the world’s largest data centers, his partnership with Nvidia underscores a shared goal: advancing AI capabilities that redefine both industry and infrastructure.

With this latest funding round, xAI not only secures the hardware it needs but also signals its intent to lead the global AI race — blending visionary ambition with unprecedented financial muscle.