xAI Secures $20 Billion in Funding with Participation from Nvidia and Cisco

Nvidia Joins as a Strategic Investor

xAI, the artificial intelligence (AI) startup founded by Tesla CEO Elon Musk, has secured an additional $20 billion in funding with the backing of companies such as Nvidia.

Reuters Yonhap News

xAI announced on January 6 (local time) that it had raised $20 billion in its recently completed Series E funding round, surpassing its original target of $15 billion.

Investors participating in this round include the Qatar Investment Authority, Valor Equity Partners, StepStone Group, Fidelity Management & Research Company, and Baron Capital Group. Strategic investors such as Nvidia and Cisco Investments also took part, and according to xAI, they continue to support the rapid expansion of xAI's computing infrastructure and the establishment of the world's largest graphics processing unit (GPU) cluster.

The company stated that, as of last year, it had expanded its computational advantage by building the world's largest AI supercomputer at its Colossus I·II data centers, and by the end of the year had secured performance equivalent to more than one million Nvidia H100 GPUs. xAI also emphasized that it is focusing on launching innovative products based on its AI model "Grok 5," which is currently in training, aiming to transform the way we live, work, and spend our leisure time.

According to Bloomberg News, sources say xAI plans to split the new funding into approximately $7.5 billion in equity investment and up to $12.5 billion in debt through a special purpose vehicle (SPV). This SPV will be used to purchase Nvidia products, and xAI intends to recoup its investment by leasing these chips to external parties over the next five years, Bloomberg explained.