Musk's xAI funding round reaches 20 billion dollars!

Big Investment Move for Musk's xAI

Elon Musk’s artificial intelligence venture xAI is receiving more interest than expected in its new funding round from several major investors, including Nvidia. With these participations, the total size of the funding round is set at 20 billion dollars.

Investment Through SPV Structure

The financing is being conducted through a special investment vehicle (SPV). This structure plans to acquire Nvidia processors, allowing xAI to lease these chips over a five-year period. This system will enable investors to achieve returns not directly from the company but through the assets.

Nvidia's Contribution and Investment Increase

Sources indicate that Nvidia plans to invest around 2 billion dollars in the equity portion of the deal. There has been a noticeable increase in large investments in the artificial intelligence sector recently. For example, OpenAI signed a new deal for AMD chips, while Meta has created a financing package worth 29 billion dollars for data centers. Additionally, Oracle has also financed 38 billion dollars in borrowing for infrastructure investments.

High Capital Requirement

In the US bond markets, technology companies have borrowed a total of 157 billion dollars this year, representing a 70% increase compared to last year. xAI is attracting attention with its high capital requirements. According to a Bloomberg report, although the company raised about 10 billion dollars earlier this year, it is spending around 1 billion dollars per month.

Musk's Investment Strategy

Elon Musk aims to attract investments into xAI from his own companies, such as SpaceX. By the end of the year, Tesla shareholders will decide whether the electric vehicle manufacturer will invest in xAI.