Elon Musk’s AI startup xAI is raising $20 billion in funding, including a $2 billion equity investment from Nvidia. The financing will be split between $7.5 billion of equity and up to $12.5 billion of debt, structured through a special purpose vehicle to buy Nvidia processors for data center Colossus 2.

This funding round exceeds initial plans and is tied to using Nvidia graphics processing units. xAI’s financing includes equity and debt, with $7.5 billion in equity and up to $12.5 billion in debt. The special purpose vehicle will be used to purchase Nvidia processors.

Nvidia has not commented on the investment, while xAI has not responded to requests for comment. Elon Musk previously denied reports of xAI raising $10 billion at a $200 billion valuation in September. He launched xAI in July 2023 as an alternative to OpenAI’s ChatGPT.

Read more at Yahoo Finance: Musk’s xAI nears $20 billion capital raise tied to Nvidia chips, Bloomberg News reports