Nvidia stock rose in the premarket. The leading AI chip maker was on track to snap a three-day losing streak after a report that it could invest in Elon Musk's xAI.

Nvidia is one of the backers, and could invest as much as $2 billion in the privately held AI start-up, according to Bloomberg citing people with knowledge of the matter. It would be the latest move by the chip maker to help accelerate its customers' investment in AI, including in Nvidia's products.

Barron's has reached out to Nvidia and xAI for a comment.

Nvidia recently announced deals with OpenAI and Intel sparking a debate about the circular nature of deals with customers. Bank of America analysts see these concerns as "highly overstated."

"AI success has little to do with vendor financing, and significantly more dependent on practical pace of data center construction and reliable access to utilities," analysts led by Vivek Arya wrote in a note dated Monday. Arya maintained a Buy rating on Nvidia and peers Advance Micro Devices and Broadcom, with a price target on the former of $235.

Nvidia shares were up 0.6% in premarket trading Wednesday, following a 0.3% drop Tuesday. Year to date gains stand at 38% coming into ordinary trading, while the S&P 500 has gained 14% over the same period.