xAI raises over $20 billion in funding, surpassing expectations, as NVIDIA and Cisco strategically participate in the AI infrastructure race

Elon Musk’s artificial intelligence company xAI has once again surpassed expectations in fundraising scale. According to the latest news, its Series E funding round ultimately raised $20 billion, far exceeding the original target of $15 billion. More notably, the appearance of strategic investors NVIDIA, the chip giant, and Cisco, the network equipment provider, marks the industry’s top players’ recognition of xAI’s core position in the global AI infrastructure competition.

Strategic lineup behind the breakthrough in funding

The list of participants in this funding round is truly luxurious. In addition to traditional venture capital firms such as Valor Equity, Stepstone, Fidelity, and Qatar Sovereign Fund, the strategic involvement of NVIDIA and Cisco is particularly eye-catching. NVIDIA, as the absolute ruler of AI chips, means that its participation signifies strong industry chain upstream support for xAI’s GPU cluster construction. Cisco represents the voice in the network infrastructure field.

This is not just about funding but a strategic industry chain synergy. NVIDIA needs large clients like xAI to absorb its high-end chips such as GB200, while xAI requires NVIDIA’s chips and Cisco’s network solutions to build the “world’s largest GPU cluster.” Both sides have their needs met, but this cooperation has a profound impact on the entire AI infrastructure ecosystem.

Dual investment in energy and computing power

The scale of funding is only a surface number; true competitiveness lies in infrastructure investment. According to the latest news, xAI has purchased five 380MW gas turbines, with the first two scheduled to be operational by the end of 2026. These energy facilities will support the power needs of over 600,000 NVIDIA GB200-level GPUs.

This investment scale clearly indicates that energy costs for AI training and inference are becoming decisive factors. xAI is not only competing for chips but also for energy. This “computing power + energy” supporting investment is the moat that differentiates it from other AI companies.

Product progress supporting funding confidence

The ability to raise funds beyond expectations is closely linked to impressive product performance. According to reports, xAI achieved multiple breakthroughs in 2025: iterations of the Grok series models, launch of voice assistants, image generation features, and deep integration with the X platform. These functionalities have led to Grok reaching 600 million monthly active users.

Interestingly, Grok Code Fast 1 recently topped the OpenRouter code model leaderboard, processing 54 billion tokens, beating competitors like DeepSeek and Claude. This is not just a ranking victory but also a proof of xAI’s competitiveness in practical applications. Additionally, Grok has reached the top of the free app charts in Japan’s App Store, surpassing ChatGPT.

Position in the industry financing landscape

This $20 billion fundraising scale needs to be understood in a broader context. According to the latest data, the total scale of global SPV (Special Purpose Vehicle) financing for AI data centers has reached $120 billion. Among them, Oracle accounts for $66 billion, Meta’s financing is $30 billion, and xAI’s $20 billion ranks third.

This ranking is very meaningful. Although xAI was established later, its speed and scale of fundraising have already placed it among the top three in the industry. This reflects market confidence in its AI capabilities and infrastructure development potential.

Future competitive landscape

From current fundraising and infrastructure investments, xAI is building a complete AI ecosystem closed loop: chip supply (strategic investment from NVIDIA), network infrastructure (Cisco participation), energy security (self-built gas turbines), and product applications (Grok series). Such full-chain integration is still relatively rare in the AI industry.

The Grok 5 model is currently under training and is expected to further enhance xAI’s competitiveness. If the energy facilities are delivered on time, xAI’s computing scale and product performance are expected to achieve new breakthroughs by 2026.

Summary

The significance of this round of xAI funding goes beyond the numbers themselves. The oversubscription of $20 billion reflects market recognition of its AI capabilities, and the strategic involvement of NVIDIA and Cisco marks xAI as a key player in the global AI infrastructure competition. The integrated investment in energy + computing power + products provides xAI with a foundation for long-term competition with other AI giants. As the total AI computing power financing reaches $120 billion, xAI’s position is shifting from a follower to one of the leaders.