Marina Lyubimova
● Elon Musk's xAI is pursuing a major $20 billion lease-to-own deal for Nvidia chips to build its second data center in Memphis. Unlike competitors who rent cloud computing power, xAI wants to own its infrastructure outright—a bold move that could give the company long-term independence but comes with significant financial risk.
● The financing breaks down to $7.5 billion in equity and $12.5 billion in debt raised by Valor Equity Partners, with Nvidia contributing $2 billion. This structure puts most of the financial burden on Valor, a longtime Musk supporter, while giving xAI the flexibility to build without carrying the full weight of the deal.
● For Nvidia, this validates strong demand for its chips and strengthens its revenue stream. But it also highlights how the AI industry increasingly depends on massive, high-risk financing deals. The lease-to-own model gives xAI flexibility, though it puts pressure on Valor if the AI sector's momentum slows.
● As *Walter Bloomberg noted: "xAI is pursuing a $20 billion lease-to-own deal for Nvidia chips to build its second data center in Memphis. Unlike rivals, xAI aims to own most of its infrastructure." This reflects Musk's ownership-first approach to scaling AI—a strategy that could reshape how future AI companies finance their growth in the race for computing power.
Marina Lyubimova
