Nvidia Reportedly to Take Up to $2 Billion Equity Stake in Elon Musk’s xAI

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Nvidia is preparing to invest up to $2 billion in Elon Musk’s artificial intelligence startup xAI, according to people familiar with the matter. The investment would be part of a wider $20 billion capital raise as xAI accelerates its AI infrastructure expansion.

The package may include about $7.5 billion in equity and $12.5 billion in debt. A special purpose vehicle would buy Nvidia GPUs and lease them back to xAI for deployment.

This structure reduces pressure on xAI’s balance sheet while giving access to advanced chips that remain in limited supply. Similar financing deals have already surfaced in the AI sector as demand for computing power continues to outpace availability.

JUST IN: Nvidia $NVDA to take up to $2 billion equity stake in Elon Musk's xAI, Bloomberg reports. pic.twitter.com/FFMMGaaLI6

— Watcher.Guru (@WatcherGuru) October 7, 2025

For Nvidia, the stake would boost one of its largest customers and generate potential returns if xAI achieves scale. It also highlights Musk’s willingness to move beyond xAI’s role as a chatbot maker and position it as a central player in the AI ecosystem.

Musk’s spending is already substantial. Reports suggest xAI is burning close to $1 billion each month to train large AI models. The company is also building Colossus 2, a massive data center in Memphis designed to rival the world’s largest AI clusters.

Analysts note the deal shows both opportunity and risk. Nvidia would strengthen its dominance in AI hardware, but heavy reliance on one major customer could pose regulatory questions. Still, the partnership would give Musk reliable access to cutting-edge GPUs, critical for scaling AI.

If confirmed, this would be among the largest financings in the AI industry and could reset strategies across chipmakers and developers.

Market observers told CoinMarketCap that investor attention is rising around AI-linked assets. Additional industry insights can be found at Financyze.

Recap

• Nvidia may invest up to $2 billion in xAI.
• Part of a $20 billion fundraising package.
• Structure uses GPUs leased through a special vehicle.
• xAI spending close to $1 billion per month.
• Colossus 2 data center under development.