Elon Musk’s artificial intelligence startup, xAI, has raised $20 billion in its latest funding round, with AI hardware powerhouse Nvidia leading the investment.
Bloomberg reports that Elon Musk’s xAI has successfully raised $20 billion in its latest funding round. The financing, which includes both equity and debt, was led by Nvidia, the leading chipmaker in the AI sector. The funding round, initially reported to be half the amount, has grown in size as xAI seeks to accelerate its AI investments and development.
The funding will be split between $7.5 billion in equity and up to $12.5 billion in debt through a special purpose vehicle (SPV). The SPV will be used to purchase Nvidia processors, which xAI will then rent for a period of five years. This unique deal structure, backed by the Nvidia chips rather than the company itself, could serve as a model for other tech firms looking to reduce their debt exposure.
Nvidia’s investment in xAI is part of the chipmaker’s strategy to help accelerate its customers’ AI investments. The company is investing as much as $2 billion in the equity portion of the transaction. Nvidia’s leaders have stated that they will use the company’s growing financial strength to speed up the deployment of artificial intelligence across the industry.
Breitbart News previously reported that Nvidia was making a massive $100 billion investment in Sam Altman’s OpenAI. The chipmaker’s investment in Altman’s hated rival Musk comes just days after OpenAI signed a deal with Nvidia’s own rival, AMD.
In addition to Nvidia, other notable investors in the funding round include Apollo Global Management, Diameter Capital Partners, and Valor Capital. Apollo is participating in both the equity and debt portions of the deal.
xAI has been particularly eager for capital, having already raised about $10 billion in corporate equity and debt earlier this year. The company has been burning through $1 billion per month, according to reports. Musk has also tapped into his empire of companies, including SpaceX, for investment in xAI. Later this year, Tesla investors will vote on whether the electric carmaker should invest in xAI as well.
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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