Musk’s xAI Seeks $12 Billion for AI Data Center Push

Elon Musk’s artificial intelligence venture xAI seeks to obtain $12 billion in funding for infrastructure expansion to support its Grok chatbot development according to people who have knowledge about the matter. The Wall Street Journal reports that Valor Equity Partners under the leadership of Musk ally Antonio Gracias leads the financing process by approaching lenders.

The new funding will primarily be used to buy numerous Nvidia AI chips that are in high global demand to establish a data center for training and operating Grok at full capacity. The leasing model for xAI will allow the company to obtain the necessary chips without direct acquisition.

Neither xAI nor Valor responded to requests for comment.

Musk's funding drive demonstrates his intention to establish xAI as a major competitor in the rapidly expanding AI competition. The launch of Grok as a ChatGPT competitor led xAI to quickly establish itself through its integration of Grok into X which was previously known as Twitter.

The Series B funding round of xAI brought in $6 billion during the first part of this year which established the company value at $24 billion. The current funding campaign demonstrates the increasing financial requirements of AI development and infrastructure construction because of intense global competition for computing resources.