Elon Musk's xAI Plans To Raise $12 Billion In Debt To Buy Nvidia Chips And Build One Of The World's Largest AI Superclusters: Report
Elon Musk's artificial intelligence startup xAI is reportedly seeking to raise up to $12 billion in debt to fund a massive AI supercomputing infrastructure powered by Nvidia Corporation's (NASDAQ:NVDA) chips.
What Happened: xAI is working with Valor Equity Partners to line up financing from lenders, with the capital earmarked for purchasing high-end Nvidia GPUs, reported the Wall Street Journal, citing people familiar with the situation.
The chips would be leased back to xAI to support its AI chatbot Grok and broader large language model training efforts.
On Tuesday, Musk posted on X, formerly Twitter, that xAI is currently training Grok on 230,000 GPUs, including 30,000 Nvidia GB200 AI chips. He also revealed that a new supercluster with 550,000 GB200 and GB300 chips will soon be operational.
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In another post, he outlined xAI’s plan to deploy 50 million units of H100-equivalent AI compute within five years.
Why It's Important: Earlier this month, it was announced that Musk’s xAI has raised $10 billion — $5 billion in debt and $5 billion in strategic equity — to expand its AI infrastructure.
The latest funding talks come just weeks after the Financial Times reported xAI was exploring a new equity round that could value the company between $170 billion and $200 billion.
At the time, Musk said xAI was not seeking capital, asserting, "We have plenty of capital."
However, sources told WSJ the new financing may include lender-imposed conditions such as repayment within three years and borrowing caps to limit risk.
xAI's ambitious plans signal intensifying competition in the global AI arms race, where rivals like OpenAI, Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google and China's DeepSeek are also scaling up infrastructure.
According to Benzinga’s Edge Stock Rankings, Nvidia maintains strong upward momentum across short, medium and long-term timeframes. Additional performance details can be found here.
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