Elon Musk's xAI to Raise $20 Billion from NVIDIA and Others: Report

xAI, the AI startup founded by Elon Musk, is raising its current round of financing to up to $20 billion from backers that include NVIDIA, reported Bloomberg on October 8. 

The report added that this involves equity and debt financing through a special purpose vehicle (SPV), which will purchase NVIDIA’s hardware systems and rent them to xAI for its Colossus 2 data centre project. 

These hardware systems will be rented out for a period of five years, according to the report. 

The report also states that the total financing will be divided between approximately $7.5 billion of equity and $12.5 billion of debt in the SPV. NVIDIA is reportedly investing up to $2 billion in the equity part of the transaction. 

Apollo Global Management and Diameter Capital Partners are also participating in the fundraising. 

It was reported in July that SpaceX, the space technology company also founded by Musk, approved an investment of $2 billion in xAI as part of the startup’s $5 billion equity fundraising effort. 

While the CNBC reported last month that xAI is raising $10 billion at a $200 billion valuation, Musk confirmed in a social media post that the company ‘is not raising any capital right now.’ 

In another development, the Financial Times reported that Anthony Armstrong, a former Morgan Stanley banker, has been appointed as the company's new chief financial officer. 

He is said to have advised on the Twitter takeover and was Musk’s ‘key lieutenant’ during his stint at the Department of Government Efficiency (DOGE) in the US Administration. 

Armstrong will serve as the financial head for both xAI and the social media platform X, according to a report citing sources familiar with the matter. 

His appointment follows the departure of Mike Liberatore, who previously held the position. Liberatore has now become OpenAI’s new business finance officer.