Elon Musk’s xAI Secures $10 Billion to Expand AI Infrastructure
Elon Musk’s xAI Holdings Corp. has successfully raised $10 billion to fund its artificial intelligence projects. Morgan Stanley facilitated the deal, which includes $5 billion in equity and $5 billion in loans. Some loans are secured notes, meaning xAI offered collateral to lenders, a strategy also used by other AI companies leveraging graphics cards as collateral.
Investing in AI Development and Infrastructure
The investment will support xAI’s efforts to develop advanced AI solutions, including one of the largest data centers globally and its flagship Grok platform. Last year, xAI built a massive data center in Memphis to power its AI training. This center houses a supercomputer named Colossus, initially outfitted with 100,000 graphics cards. By May, the number of AI accelerators had doubled, and plans are in place to add 800,000 more graphics cards in the future.
Massive Expansion in Memphis
To support this growth, xAI purchased a 1 million-square-foot property in Memphis earlier this year for approximately $80 million. Positioned near a power plant, this campus will host a data center with up to 350,000 graphics cards.
Power availability can fluctuate, especially during peak household usage. To offset this, xAI deployed over 165 Tesla Megapack energy storage systems at the Memphis site. Each Megapack can store 3.9 megawatt hours—enough to power around 3,600 homes for an hour, ensuring consistent energy supply for the data center.
Innovations in Sustainability
Alongside energy storage, xAI is constructing what it describes as the world’s largest ceramic membrane system. This water treatment technology will recycle more than 13 million gallons of wastewater daily, making it suitable for cooling the data center. This approach reduces environmental impact and supports the facility’s massive energy demands.
Grok Platform and AI Capabilities
xAI’s Colossus supercomputer powers its Grok series of large language models (LLMs). The latest model, Grok 3, was launched in February and was trained with ten times more hardware compared to previous versions. This increase in resources has improved its ability to perform reasoning tasks reliably.
Funding and Valuation Growth
This $10 billion funding round is the third multibillion-dollar investment xAI has secured since the beginning of 2024. In November, a $6 billion raise valued the company at $50 billion. That valuation jumped to $80 billion after xAI merged with X in March.
For professionals interested in AI development and infrastructure, this expansion highlights the scale and investment required to push advanced AI systems forward. For more on AI training and courses, you can explore resources available at Complete AI Training.
Your membership also unlocks:
