Elon Musk’s xAI completes a $20 billion funding round with investors like Nvidia Corp. and Valor Equity Partners. The company plans to accelerate infrastructure buildout and develop transformative AI products, aiming to reach billions of users and advance research on understanding the universe.

The financing is split between $7.5 billion of equity and $12.5 billion of debt, creating a special purpose vehicle to buy Nvidia processors. xAI will rent out chips for five years, allowing investors to recoup their investment. This unique deal structure could help tech firms reduce debt exposure.

Musk’s xAI, needing additional capital, plans to expand its data center complex in Memphis. The company is purchasing a third building, increasing its artificial intelligence computing capacity to nearly 2 gigawatts. Musk has also sought backing from his other companies, including SpaceX, for xAI.

Tesla Inc. shareholders voted on investing in xAI, with more votes in favor than against. General Counsel Brandon Ehrhart noted a significant number of abstentions. Although the vote was not binding, Musk has expressed support for a potential $5 billion infusion in 2024.

Read more at Yahoo Finance: Musk’s xAI Closed $20 Billion Funding With Nvidia Backing