Behind xAI's $20 billion oversubscription: NVIDIA's participation and the upgrade of computing power arms race

xAI has just completed a surprisingly large funding round. The official announcement states that the Series E financing raised a total of $20 billion, one-third more than the original target of $15 billion. This not only reflects investors’ confidence in xAI but also indicates that the competition for AI computing power is heating up.

Signals from the Investor Lineup

The list of investors in this round is noteworthy. In addition to traditional financial institutions such as Valor Equity Partners, StepStone Group, Fidelity Management & Research, Qatar Investment Authority, MGX, and Baron Capital Group, NVIDIA and Cisco participated as strategic investors.

This detail is very important. NVIDIA is not only a GPU supplier but also now a strategic investor in xAI. What does this imply? It shows that NVIDIA is confident in xAI’s expansion plans for computing power and is deepening its cooperation through investment. Cisco’s participation hints at synergies in network infrastructure.

Actual Progress in Products and Computing Power

According to official disclosures, xAI’s performance in 2025 is not just talk:

• Infrastructure: Built two supercomputing centers, Colossus I and II, with GPU capacity exceeding 1 million H100 equivalents
• Product lineup: Launched the Grok 4 series models, along with applications like Grok Voice and Grok Imagine (image generation)
• User base: Combined, X and Grok applications reach approximately 600 million monthly active users
• Latest developments: Grok Code Fast 1 ranks first on OpenRouter, and also hits the top spot on the Japanese App Store

These figures are not empty words but verified through actual products. A user base of 600 million monthly active users is already a substantial scale.

Strategic Behind the Funding

The $20 billion is mainly allocated to three areas:

1. Accelerate infrastructure development — xAI is still expanding, not maintaining the status quo
2. Support Grok 5 model training — next-generation models are already in planning
3. Promote consumer and enterprise product development — productization and commercialization are proceeding in parallel

It’s worth noting that xAI recently purchased five 380MW gas turbines, with the first two expected to be delivered by the end of 2026. This can support the operation of over 600,000 Nvidia GB200-class GPUs. This demonstrates how ambitious xAI’s computing power plans are — not just in fundraising but also preparing for long-term energy supply.

Industry Benchmark Perspective

According to reports, in the AI data center financing landscape totaling $120 billion, Oracle holds half with $66 billion, Meta’s financing reaches $30 billion, and xAI’s $20 billion ranks third. This ranking itself indicates xAI’s position in the AI infrastructure competition — while not first, it is already in the top tier.

Summary

The significance of xAI’s oversubscribed funding round lies in three levels: first, the impressive lineup of investors (especially NVIDIA’s strategic participation) proves that xAI’s technological strength and business prospects are recognized by the industry; second, the $20 billion scale reflects that AI computing power competition has entered a heated phase, with all players ramping up infrastructure; finally, xAI’s actual achievements in products, user scale, and computing power demonstrate that this funding is not just a numbers game but backed by real business progress.

Future highlights include the training progress of the Grok 5 model, the delivery and operational effects of the gas turbines, and the actual conversion rate of xAI products in consumer and enterprise markets.