Elon Musk's artificial intelligence startup, xAI, wants to raise up to $12bn in debt to accelerate its expansion plans, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.
The deal is being led by investment firm Valor Equity Partners, founded by Antonio Gracias, a close associate of Musk, who is reportedly in talks with several lenders to raise the funds.
The money would mainly be used to finance the purchase of a large number of advanced chips from Nvidia, which would then be leased to xAI to power a new data center for training and operating Grok, the chatbot developed by the startup, the newspaper says.
Also according to the WSJ, some lenders would like the debt to be repaid within three years, while limiting the amount borrowed to contain their exposure to risk.
Training and deploying cutting-edge AI systems requires considerable resources: expensive hardware, intensive computing capabilities, and highly specialized engineers, in a competitive environment dominated by giants such as OpenAI, Alphabet, and China's DeepSeek.
In a message posted on X on Tuesday, Elon Musk said that xAI was training Grok on 230,000 graphics processing units (GPUs), including 30,000 Nvidia GB200 chips, in a supercomputing cluster. Inference is provided by cloud providers. He added that a second supercluster would be launched soon, equipped with an initial batch of 550,000 GB200 and GB300 chips.
According to estimates reported in the trade press, xAI is expected to consume around $13bn in 2025.
In early July, the Financial Times reported that xAI was in talks to raise more funds in a deal that would value the startup at between $170bn and $200bn. Elon Musk denied that any fundraising was underway, saying, "We have more than enough capital."
