Nvidia plans to invest US$2 billion in xAI, Jen-Hsun Huang: Wants to participate in all Musk's projects

NVIDIA will participate in the latest round of financing for xAI, an artificial intelligence startup led by Elon Musk, with NVIDIA’s equity investment amounting to up to US$2 billion. Jensen Huang bluntly said that he is very excited about the financing opportunities of xAI. His only regret is that he did not invest more funds.
(Preliminary summary: AMD let OpenAI "take a 10% stake" and the stock price soared 24%, declaring a full-scale war on Nvidia Cuda?)
(Background supplement: Huang Renxun claimed that plumbers and electricians are the most sought-after in the AI era, are Taiwanese blue-collar workers really more profitable?)

According to "Bloomberg" citing people familiar with the matter, global chip giant NVIDIA will participate in the investment by Elon Musk. In the latest round of financing for xAI, an artificial intelligence startup led by Musk, Huida’s equity investment can reach up to US$2 billion.

Financing details: A combination of equity and debt helps xAI expand its data center

The report pointed out that the total amount of this round of financing is as high as 20 billion U.S. dollars. The combination of equity and debt financing has doubled the scale from the previous one. The equity portion is estimated to be approximately $7.5 billion, while the debt portion is as high as $12.5 billion. It is understood that xAI will use the funds to purchase Huida’s GPUs for use in its Colossus 2 large-scale data center in Memphis, Tennessee, USA.

The financing structure will be a special purpose vehicle (SPV), with the SPV purchasing Huida hardware and xAI using it on a five-year lease basis. This arrangement allows institutional investors to recover funds through chip leasing, with the debt being collateralized by GPUs rather than xAI’s overall assets.

Bloomberg continued to point out that xAI is currently facing high operating cost pressure, with its monthly cash consumption reaching approximately US$1 billion.

Jensen Huang praised the potential of xAI, but regretted not investing more money

Huida CEO Jensen Huang confirmed Bloomberg’s report in an interview with CNBC on the evening of October 8 and expressed high enthusiasm for xAI’s financing opportunities. He said:

"I am very excited about the financing opportunities of xAI. As an investor, my only regret is not investing more money. Almost everything related to Musk, you want to be involved. He gave us the opportunity to invest in xAI, and I am very happy about it."

Huang Jenxun emphasized that this is not a traditional venture capital investment, but a long-term investment in a company with great potential for the future. He believes that the development prospects of xAI in the field of artificial intelligence are exciting, and Huida hopes to further support the construction of the AI ecosystem through this investment.

Huang Renxun also pointed out that the current AI industry is completely different from the situation during the Internet bubble in 2000. At that time, the total market value of Internet companies was only about $30 to $40 billion. Today, hyperscalers have a business scale of $2.5 trillion, with capital expenditures of about $500 billion. He emphasized that advances in AI technology, such as reasoning capabilities and tool usage, have allowed new generation AI models to begin to generate profits, showing that their commercial value is rapidly being realized.