Elon Musk Bets Big on AI: xAI Raises $20 Billion with Help from Nvidia

The race for artificial intelligence shows no signs of slowing down, and Elon Musk is all in. His startup xAI is raising $20 billion — double the initially expected amount — with Nvidia, the AI chip giant, among the major backers.

The plan is ambitious: build Colossus 2, a massive data center in Memphis that will become the beating heart of xAI’s future projects. To do this, the company will use a special financial vehicle that will purchase Nvidia chips and lease them to xAI for five years. This way, Musk gets the computing power he needs, while Wall Street investors get solid guarantees to recoup their funds.

Nvidia is investing up to $2 billion in the equity portion of the deal. Other financial heavyweights involved include Apollo Global Management, Diameter Capital, and Valor Capital.

AI funding is booming: in 2025 alone, U.S. tech companies have already raised more than $157 billion in bonds — a 70% increase over last year. Giants like Meta, OpenAI, and Oracle are moving fast in the same direction.

But for Musk, money is never enough. According to Bloomberg, xAI is burning through $1 billion a month. After tapping SpaceX for funding, Musk is now eyeing Tesla, whose shareholders will vote on whether the electric carmaker should invest in xAI.

The ultimate goal? Turn AI into the foundation for autonomous vehicles and futuristic robots. And if anyone can afford to bet this big on the future, it’s Elon Musk.