Elon Musk's xAI upsizes funding round to get $20B, anchored by Nvidia equity investment -report

[Artificial Intelligence AI Assistant Apps - DeepSeek, xAI Grok, OpenAI ChatGPT]

Elon Musk's artificial intelligence startup, xAI (X.AI [https://seekingalpha.com/symbol/X.AI]) has been reportedly raising more financing than initially planned, aiming to bring its ongoing funding round to a massive $20 billion, Bloomberg News reported on Tuesday, citing informed sources.

Sources cited by Bloomberg indicate Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) is providing up to $2 billion in the equity component of the deal. The total financing, which includes both equity and debt, is strategically linked to the Nvidia Graphics Processing Units (GPUs) that xAI plans to utilize in its advanced "Colossus 2" data center.

According to the report [https://www.bloomberg.com/news/articles/2025-10-07/musk-s-xai-nears-20-billion-capital-raise-tied-to-nvidia-chips], the xAI financing could include $12.5 billion in debt and $7.5 billion in equity, calling the arrangement “unique” as the deal would be “backed by the GPUs as opposed to the company.”

This debt component will be arranged via a special purpose vehicle ((SPV)). The SPV is specifically designated to purchase the Nvidia processors required for xAI's operations. xAI will then rent these processors from the SPV over a period of five years, bloomberg noted.

Musk said on X in September that the company wasn’t raising capital [https://x.com/elonmusk/status/1969117472520282370].

Launched by Elon Musk in July 2023, xAI and its flagship large language model, Grok, were developed specifically to challenge the dominance of OpenAI's ChatGPT.

Most recently, Elon Musk appointed [https://seekingalpha.com/news/4502183-elon-musk-appoints-former-morgan-stanley-executive-as-cfo-of-xai-and-x-ft] a former Morgan Stanley executive as CFO of xAI and X: FT.

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* OpenAI asks court to dismiss trade-secret lawsuit from Elon Musk's xAI [https://seekingalpha.com/news/4501559-openai-asks-court-to-dismiss-trade-secret-lawsuit-from-elon-musks-xai]
* Financial information for xAI [https://seekingalpha.com/symbol/X.AI/income-statement]