Elon Musk's net worth surged to $484 billion (£362 billion) after falling steeply weeks ago from $500 billion (£374.9 billion). While Musk's net worth is tied to his massive stakes in Tesla and SpaceX, his holdings in xAI could potentially be a reason for the latest boost to his wealth.
Reports emerged that Musk's xAI is working on a $20 billion (£14.9 billion) lease-to-own deal for Nvidia chips for its Colossus 2 supersize data centre in Memphis.
Long-time Musk backer Valor Equity Partners is raising $20 billion for a special purpose vehicle (SPV) that will buy Nvidia chips and lease them to xAI for several years, with the option of buying them at the end of the lease term. The SPV is composed of $7.5 billion (£5.6 billion) in equity from Valor, $2 billion (£1.4 billion) of investment from Nvidia, and $12.5 billion (£9.3 billion) in debt.
Valor is an investor in xAI, and its chief investment officer, Antonio Gracias, serves on the board of his rocket company, SpaceX. Gracias also worked at the US Social Security Administration in early 2025 as part of Musk's Department of Government Efficiency push.
However, Valor, which manages $17.5 billion (£13.1 billion), is facing hurdles in raising billions in risky equity while venturing into debt markets swamped by the demands of AI infrastructure.
Note that the SPV will only pay for chips, and not the energy infrastructure or other assets required for Colossus 2. The SPV saves xAI from having to put up the cash up front.
xAI already owns the land under Colossus 2 and already has around 100,000 Nvidia GB200 chips online. However, the company plans to install another 200,000 chips over the next few months. Earlier this year, Musk said he expected to have a total of 550,000 chips at Colossus 2.
The Valor-led deal would be much bigger than any other chip-backed deal in history, and is expected to reduce xAI's overall cost of funding. The arrangement also includes more equity, approximately 40%, than a typical data centre deal, providing lenders with a cushion if xAI defaults on lease payments.
xAI has also formed a joint venture called Stateline Power with Texas-based companies Solaris Energy Infrastructure, which will supply energy to power the Colossus 2 data centre. Solaris rents natural gas turbines to data centres and oil and gas companies.
An xAI subsidiary contributed $86 million (£64.4 million) to the JV, while Solaris' contribution was $86.4 million (£64.7 million). Stateline has a floating-rate term loan of up to $550 million (£412.3 million) with an interest rate of about 10.25%.
The JV is actively setting up the turbines at a site in northern Mississippi, only a mile away from the Colossus 2 site. Solaris expects to supply over 1 gigawatt of power for xAI by early 2027, according to regulatory filings.
xAI wants to have as much control as possible over Colossus 2, in contrast to rivals like OpenAI and Anthropic, which have partnered with outside cloud firms for computing power requirements.
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