NVIDIA joins xAI funding round, backing Musk’s AI ambitions with advanced chips and software to scale computing power.
Elon Musk’s artificial intelligence startup xAI has raised $20 billion in a new funding round, exceeding its initial $15 billion target as it accelerates development of its Grok family of AI models. The oversubscribed round highlights sustained investor confidence in large scale AI platforms despite growing scrutiny over the sector’s ability to deliver long term returns.
The latest funding attracted backing from major global investors including Valor Equity Partners, Stepstone Group, Fidelity Management and Research Company, Qatar Investment Authority, MGX and Baron Capital Group. NVIDIA also participated in the round and will support xAI’s computing expansion by supplying advanced AI chips and software, strengthening the company’s infrastructure at a time when access to high performance computing remains a critical competitive advantage.
Founded by Musk, xAI is competing in an increasingly crowded generative AI market dominated by players such as OpenAI, Google and Anthropic. The company said the fresh capital will be used to scale model training, expand data centre capacity and accelerate the rollout of new consumer and enterprise products.
xAI claimed significant progress during 2025, including the deployment of what it describes as the world’s largest AI supercomputers. Its Colossus I and II data centres in Memphis now house more than one million NVIDIA GPUs, forming the backbone of its model training efforts. The company has also launched Grok 4 language models and Grok Voice, a real time voice assistant now available in Tesla vehicles, and said it is currently training Grok 5.
However, the funding announcement comes amid controversy surrounding Grok. The AI tool has faced international criticism for enabling the creation of sexualised deepfakes of women and minors through a feature labelled Spicy Mode. xAI said its platforms currently reach around 600 million monthly active users across the X social media platform and Grok applications.