xAI finances force reliance on outside funding, The Information says

Elon Musk’s xAI is aiming to build and control the world’s most powerful data center and a massive natural gas plant to power it, The Information’s Theo Wayt and Miles Kruppa write. The scale of the project and xAI’s precarious finances are forcing the company into unusual financial arrangements that rely on outsiders to raise funding and shoulder much of the risk, the authors add. xAI wants to have as much control as possible over Colossus 2, its second supersize data center in Memphis. XAI’s desire to control its data centers is in contrast to rivals such as OpenAI and Anthropic, which have partnered more extensively with outside cloud firms to get the computing power they need, they note. The publication further highlights that xAI is working on a $20B lease-to-own deal for Nvidia (NVDA) chips, has formed joint venture with Solaris Energy for a 1-gigawatt power plant. xAI’s precarious finances force reliance on outside funding and risk-sharing, the report adds.