According to sources familiar with the matter, Elon Musk-backed artificial intelligence startup xAI is raising more capital than initially planned—including an equity investment from NVIDIA Corporation—to bring its ongoing funding round to $20 billion. The sources indicate that this financing, comprising both equity and debt components, will be linked to NVIDIA graphics processing units that xAI plans to use for its largest data center "Colossus 2" located in Memphis. These sources requested anonymity as the information is confidential.

The sources revealed that NVIDIA will invest up to $2 billion in the equity portion of this deal, representing the chip manufacturer's strategy to help accelerate artificial intelligence investments among its clients. Previous media reports had indicated xAI's funding size at half the aforementioned amount, though the financing scale may continue to grow.

A NVIDIA representative declined to comment. An xAI spokesperson did not respond to requests for comment. Musk posted on X in September stating that the company was "not currently raising any funding." This massive funding round represents just the latest in the artificial intelligence sector, which has witnessed major technology companies investing tens of billions of dollars at remarkable speed to build the infrastructure necessary for developing cutting-edge AI models. Earlier this week, OpenAI announced a multi-year agreement to use Advanced Micro Devices chips. In recent months, Meta Platforms has also signed multiple billion-dollar agreements, including a $29 billion data center financing plan. Oracle Corporation has likewise raised $38 billion in debt financing for its infrastructure.