Musk's XAI expands funding to $20 billion, NVIDIA invests $2 billion to support AI infrastructure expansion.

Elon Musk's xAI is expanding its financing scale, increasing from the original $10 billion to $20 billion, with NVIDIA also participating in the financing. This financing adopts a special structure of "equity plus debt," with the funds primarily used to purchase NVIDIA chips for xAI, which will then be leased back for its own use.

xAI's financing scale doubles, with NVIDIA investing 2 billion dollars to participate.

According to reports, this financing was conducted through a "special purpose vehicle" (SPV, Special Purpose Vehicle), with a total amount of approximately 20 billion dollars, which includes about 7.5 billion dollars in equity and 12.5 billion dollars in debt.

This time NVIDIA will invest $2 billion to assist xAI in purchasing NVIDIA chips through this vehicle and provide them to xAI's "Colossus 2" super data center on a rental basis. This data center is located in Memphis, USA, and is currently xAI's largest AI base.

What is SPV and why use SPV to finance and reduce risks?

First, SPV refers to a company or legal entity that is temporarily established for a specific transaction or purpose. In other words, investors put money into the SPV, which is used to execute specific tasks, such as purchasing real estate, aircraft, chips, or engaging in high-risk investments or projects related to bond financing.

In this way, the parent company or main investor can reduce risk, and even if the project encounters issues, it will not directly affect the financial situation of the parent company.

Using GPU as collateral, becoming a new type of financial leverage model.

This time, xAI's financing is not backed by the company itself, but is operated through an SPV. Investors put their funds into the SPV, which uses this vehicle to purchase NVIDIA's AI chips and then lease them to xAI for a term of five years.

Investors can recover costs through rental income, much like collecting rent, while xAI avoids carrying large debts. This new financing structure "secured by chips" concentrates risk in the SPV, not only reducing the financial pressure on the company but also being seen by the outside world as a new model of financial leverage that the technology industry may adopt in the future.

Apollo, Diameter Capital, and Valor Capital are also major participants.

This financing also involved many large financial institutions, such as Apollo Global Management ( and Diameter Capital Partners ) participating in the debt portion, while Valor Capital ( led the equity financing.

Not only NVIDIA, but also these institutions are targeting the growth potential of xAI and the demand for AI infrastructure, willing to invest large sums of money. NVIDIA has not commented on this, and xAI has also not responded yet. Musk previously tweeted in September )X( that the company is not currently fundraising, but this round of financing shows that the plan has clearly expanded.

The global investment wave in AI infrastructure is approaching a trillion-dollar scale.

Currently, there is no single accurate statistical figure for the scale of global AI infrastructure investment, but the overall scale can be estimated from multiple perspectives.

According to data analysis firm PitchBook, the total global venture capital amount will reach 366.8 billion USD by 2025, with AI startups attracting 192.7 billion USD, accounting for over 50% for the first time, indicating that AI has become the field with the most concentrated funding.

Meta: Plans to invest $600 billion to expand data centers across the United States by 2028.

Microsoft )Microsoft(: Has invested nearly $14 billion in OpenAI and continues to provide cloud computing and infrastructure support.

Oracle ): Signed a five-year, $300 billion supercomputing partnership agreement with OpenAI for AI computing infrastructure.

NVIDIA (: Invested hundreds of billions of dollars to strengthen global AI infrastructure and invested 2 billion dollars in xAI. CEO Jensen Huang estimates that by 2030, total global investment in AI infrastructure will reach 3 trillion to 4 trillion dollars.

United States Government StarGate ) project: It is planned to invest $500 billion over the next four years to build large AI data centers and energy facilities.

Overall, global investments in AI infrastructure will reach hundreds of billions of dollars by 2025, gradually moving towards the trillion-dollar scale.

This article discusses how Musk's xAI has expanded its financing to 20 billion USD, and NVIDIA has invested 2 billion USD to assist in the expansion of AI infrastructure. It first appeared in Chain News ABMedia.