xAI Seeks $12 Billion in Debt for AI Expansion

Elon Musk's AI startup xAI is working to secure up to $12 billion in debt to expand its AI capabilities, focusing on acquiring advanced Nvidia chips for data centers.

xAI, the artificial intelligence startup founded by Elon Musk, is reportedly working with a financier to raise up to $12 billion in debt. This funding is intended to support the company's ambitious expansion plans, particularly in acquiring a large supply of advanced Nvidia chips.

The funds will be used to lease these chips to xAI for the construction of a new data center. This facility is expected to enhance the training and deployment of xAI's AI chatbot, Grok. The company is currently utilizing 230,000 graphics processing units, including Nvidia's GB200 AI chips, in a supercluster, with plans to launch another supercluster soon.

The debt is being raised in collaboration with Valor Equity Partners, an investment firm with close ties to Musk. Some lenders are reportedly seeking repayment within three years and are looking to cap the borrowed amount to mitigate risk. xAI's expansion comes amid a competitive landscape, with rivals like OpenAI and Google also vying for dominance in AI technology.

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