Elon Musk’s AI company, xAI, is collaborating with a financier to raise as much as $12 billion to support its expansion, according to a Wall Street Journal report that cited sources familiar with the matter.
Investment firm Valor Equity Partners, founded by Antonio Gracias—a close associate of Musk—is reportedly negotiating with lenders to secure the funds.
The capital would be allocated to purchase a large volume of advanced Nvidia chips, which would then be leased to xAI for building a massive data center aimed at training and powering its AI chatbot, Grok, the WSJ reported.
According to the report, some lenders are pushing for the debt to be repaid within three years and want to impose a borrowing limit to reduce their risk.
Developing and deploying advanced AI models is a costly endeavor, demanding expensive hardware, massive computational power, and highly skilled engineers, especially in a competitive landscape where players like OpenAI, Google, and China’s DeepSeek are vying for dominance.
Musk revealed in a post on X on Tuesday that xAI is currently training Grok on 230,000 graphics processing units (GPUs), including 30,000 of Nvidia’s GB200 AI chips, within a supercluster, while inference is managed by cloud providers.
He also mentioned that another supercluster will soon go live with an initial deployment of 550,000 GB200 and GB300 chips.
Media reports suggest that the AI startup is projected to spend around $13 billion throughout 2025.
Earlier this month, reports indicated that xAI was in discussions to raise additional funds in a deal that could value the startup between $170 billion and $200 billion.
In response, Musk stated that xAI was not seeking funding, saying, “We have plenty of capital.”
