Musk's allies ready to raise $12 billion for xAI chips

Just weeks after Elon Musk's xAI raised $10 billion through the sale of stock and bonds, the startup is partnering with a trusted financier to raise up to $12 billion more for its ambitious expansion plans, the Wall Street Journal reports, citing sources familiar with the matter. Valor Equity Partners, an investment firm whose founder, Antonio Gracias, has close ties to Musk, is in talks with the financiers to raise the capital.

The money would be used to purchase a huge number of advanced Nvidia chips, which would be loaned to xAI for a new, massive data center intended to train and power the Grok artificial intelligence chatbot. Musk, the WSJ writes, needs all the financial firepower he can get to stay competitive in a fierce and expensive AI battle with well-funded rivals like Google, Microsoft, and Meta.