Elon Musk’s xAI Raises $20 Billion With NVIDIA And Cisco Support

The oversubscribed round underscores strong investor confidence in large scale AI platforms despite increasing scrutiny over the sector’s long term profitability.

The funding round drew support from leading global investors, including Valor Equity Partners, Stepstone Group, Fidelity Management, Qatar Investment Authority, MGX and Baron Capital Group.

NVIDIA also participated providing advanced AI chips and software to boost xAI’s computing infrastructure, a key advantage in the high-performance AI race.

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Founded by Elon Musk, xAI is entering the crowded generative AI market alongside OpenAI, Google and Anthropic. The company plans to use the new funding to scale model training, expand data center capacity, and accelerate new consumer and enterprise product launches.

In 2025, xAI deployed its Colossus I and II data centers in Memphis, housing over one million NVIDIA GPUs, powering its AI models. The company has released Grok 4 language models and Grok Voice, a real-time voice assistant in Tesla vehicles, while actively training Grok 5.

However, the funding announcement comes amid controversy surrounding Grok. The AI tool has faced international criticism for allowing the creation of sexualized deepfakes of women and minors via a feature called Spicy Mode.

xAI stated that its platforms currently reach approximately 600 million monthly active users across the X social media platform and Grok applications.

"It's worth asking whether X data, used as Grok model training data, could ultimately produce better models than the data that other large language model providers like OpenAI are training on," Joni Pirovich, founder and CEO of Crystal aOS