Nvidia’s Jensen Huang will invest $2 billion in a special-purpose vehicle tied to Elon Musk’s xAI, using the funds to purchase and lease GPUs for its Colossus 2 data center—an innovative financing move that cements Nvidia’s dominance in the AI chip race while propelling xAI’s $20 billion expansion. (Source: Image by RR)

Nvidia CEO Huang Praises Musk’s Ambition, Saying He Wishes Company Had Invested More

Nvidia is set to invest up to $2 billion in a special-purpose vehicle (SPV) connected to Elon Musk’s xAI, according to Bloomberg. The SPV will use those funds exclusively to buy Nvidia GPUs, which it will then lease to xAI for use in its massive Colossus 2 data center—a facility designed to power the company’s next generation of AI models. The arrangement, as noted in datacenterdynamics.com, serves as a creative financing strategy that allows xAI to access the hardware it needs while avoiding additional shareholder dilution amid its ongoing $20 billion fundraising campaign.

Nvidia’s CEO Jensen Huang openly praised Musk and xAI, calling the opportunity to invest in the company a “delight,” and joking that his only regret was not investing more. Huang’s comments reflect Nvidia’s growing pattern of embedding itself deeply within the infrastructure of major AI players, ensuring its GPUs remain the backbone of the industry’s expansion. With this deal, Nvidia not only secures long-term demand for its hardware but also tightens its strategic relationship with one of the most ambitious AI ventures on the planet.

This SPV initiative mirrors Nvidia’s broader investment playbook. In recent months, the chipmaker has made similar moves with companies such as CoreWeave, Nebius, and Nscale, each designed to fund GPU-heavy infrastructure projects that further entrench Nvidia’s technology across the AI ecosystem. Beyond xAI, the company has also pledged as much as $100 billion to OpenAI, contingent on the deployment of roughly 10 gigawatts of Nvidia-powered compute. These investments illustrate how Nvidia is financing its own growth engine by fueling the global AI buildout—ensuring its chips are indispensable to every major AI lab and data center initiative.

At the same time, the competitive landscape is shifting. OpenAI is preparing to integrate AMD chips alongside Nvidia’s, reportedly in exchange for a 10 percent equity stake in the chip designer. This move hints at an evolving power balance within the AI hardware race, as major firms seek to diversify supply chains and reduce dependence on Nvidia’s increasingly expensive GPUs. Still, Nvidia’s SPV strategy—and its close ties with xAI—demonstrate that it remains firmly in control of the AI compute market, leveraging financial innovation to sustain dominance in an era defined by insatiable demand for processing power.

read more at datacenterdynamics.com