Net worth of Elon Musk reached close to $500 billion, XAI dealt $20 billion with NVIDIA for Colossus 2
In such a scenario where artificial intelligence is giving new shapes to the industries, XAI of Elon Musk has been gathering headlines with an unprecedented lease-to-own agreement for $20 billion for NVIDIA chips. This deal has been made with the aim of providing power to the ambitious Colossus 2 data center in the company's Memphis, Tennessee, at such times when the personal property of Musk is reaching close to half-trillion-dollar figures.
Importance of $20 billion NVIDIA deal
This agreement between XAI and NVIDIA is one of the biggest single commitments for AI hardware in history. It is structured as a lease-to-own system, which allows XAI to receive state-of-the-art GPUs without immediate full capital expenditure. This deal of $20 billion will be included in a special purpose vehicle (SPV), which will be financed by a mixture of equity and a $12.5 billion loan, contributing equity of $2 billion. It will buy SPV chips and lease them to XAI for five years, which will be done only by the hardware instead of the company's balance sheet.
Basically, this agreement focuses on increasing computational capacity. Colossus 2 is being seen as the world's first gigawatt-level AI supercluster, which will be based on the existing Colossus system of XAI. Reports indicate that XAI is planning to integrate up to one million NVIDIA AI chips in this facility, which alone contains 300,000 additional GPUs in this phase.
This step is not only stronger as the spine of the AI boom, but also exposes the rising arms race in generative AI, where achieving high-performance computing is a major imperative. XAI's partnership extends beyond chips; it includes a joint venture with Solaris Energy Infrastructure, under which a 1-gigawatt power plant will be created to meet the huge energy demands of such functions.
In the global context, this transaction indicates a shift towards innovative financing in AI. Long-term leases are included in the traditional cloud rentals adopted by competitors such as OpenAI. The XAI approach provides better control and potential cost efficiency over time by grounding the data center in proprietary infrastructure. It also underlines Musk's strategy of vertical integration, reflecting his successes in Tesla and SpaceX.
How this deal can promote the growth of XAI
Founded by Musk in 2023, XAI has established itself as a competitor in the AI field with models such as Grok. With NVIDIA, this agreement is ready to accelerate progress by providing the necessary raw computational ability for training the next-generation AI systems.
With access to hundreds of thousands of additional GPUs, XAI can speed up model development, enabling larger and more sophisticated neural networks. The gigawatt capacity of Colossus 2 — which is equal to the power generation of a large nuclear reactor — can provide unprecedented training speed, reducing development times to weeks. This is especially important because XAI's goal is to make models like Grok 5, whose capabilities are expected to represent a big leap.
The lease-to-own-at-scale model converts initial capital expenditure into manageable operating expenditure, ensuring resources for R&D and talent acquisition. By securing priority access, XAI reduces competition for the limited supply of chips. In addition, reduced dependence on cloud providers can lower long-term infrastructure costs and improve data security.
This expansion can help XAI to skyrocket — it is estimated that after funding, it could reach a valuation of $200 billion. It also opens doors to new revenue sources, such as providing computing resources or integrating AI across Musk’s ecosystem, including Tesla’s autonomous driving and content moderation for X (formerly Twitter).
Impact on the total property of Musk
The total assets of Musk, which are mainly tied to Tesla (about 13%), SpaceX (about 42%), and his share in XAI, are volatile but continuously increasing. The XAI deal directly strengthens the startup’s valuation — Musk owns approximately 80% of XAI, which means that a valuation of $200 billion could add billions of dollars to his net worth overnight.
The rise in Tesla shares and the AI rally have played a major role in Musk’s wealth reaching $500 billion at the beginning of October 2025, though it later saw a slight decline. The partnership with NVIDIA not only reinforces XAI’s ambitions but also signals investor confidence, potentially attracting more capital and partnerships. NVIDIA’s $2 billion investment provides further validation to this venture, indirectly benefiting Musk’s portfolio through mutual synergies.
However, most of Musk’s wealth is illiquid and stock-based, making it sensitive to market fluctuations. If XAI achieves major success, his net worth could exceed $500 billion; conversely, delays or failures could reduce these gains.
Investment opportunities and risks in large-scale AI infrastructure
In the global tech scenario, AI infrastructure is expanding rapidly, and investments in the coming years are estimated to exceed $1 trillion. There are vast opportunities: such deals promote innovation in areas such as drug discovery, climate modeling, and autonomous systems, driving economic growth and job creation in tech hubs.
For companies like NVIDIA, these deals ensure predictable and recurring revenue flows, while companies like XAI gain a competitive edge in AI leadership.
Still, the risks are significant. The sheer scale produces financial pressure — if AI’s hype cools or revenue declines, XAI’s loan liabilities could become burdensome. Energy consumption is another critical point; a gigawatt data center can strain the power grid and raise environmental concerns, especially amid global sustainability efforts.
Market concentration around NVIDIA also exposes supply chain vulnerabilities, and if AI progress slows, overinvestment could lead to a speculative bubble.
Technologically, rapid obsolescence is a threat — new chip architectures could render existing investments outdated. Geopolitically, U.S.-China tensions increase uncertainty about semiconductor supply chains. Finally, AI expansion brings ethical risks and regulatory scrutiny, including issues of security and employment displacement.
In essence, XAI's $20 billion NVIDIA deal exemplifies Musk's adventurous approach, which could significantly enhance his wealth and the company's reputation. It promises transformational development but also signals the high-stakes nature of AI’s future — a field where massive success, escalating competition, and regulatory risks go hand in hand.
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