Nvidia plans to invest up to $2 billion in the startup xAI, founded by Elon Musk, to provide the project with cutting-edge graphics processors for the development of artificial intelligence.
This is reported by Business • Media
Funding Structure and Nvidia’s Role
The total amount of the new funding round for xAI could reach $20 billion. A significant portion of the deal is organized through a special purpose vehicle (SPV), which will receive $12.5 billion in debt capital and another $7.5 billion in equity. The SPV will acquire Nvidia graphics processors and then lease them to xAI for the operation of the Colossus 2 data center in Memphis.
“The funding will allow Musk’s company to secure the resources for the new artificial intelligence project. This model — through an SPV rather than directly through the company — could serve as an example for other tech players looking to minimize debt burden,” Bloomberg believes.
Involvement of Other Investors and Market Prospects
In addition to Nvidia, Apollo Global Management and Diameter Capital Partners are participating in the debt financing. Valor Capital has emerged as the leading shareholder in this round. This multi-tiered investment structure allows xAI to expand its capabilities for further development of artificial intelligence and enhance its competitiveness in the global market.
It was previously reported that SpaceX also plans to invest $2 billion in xAI, indicating a strong interest in the advancement of artificial intelligence technologies and the implementation of cutting-edge IT solutions.