Nvidia plans to invest as much as $2 billion in a special-purpose vehicle (SPV) linked to Elon Musk's xAI.

Funds from the SPV will then be used to buy Nvidia GPUs, which it will then rent to xAI for its Colossus 2 data center, Bloomberg reports.

When asked about the transaction, Nvidia’s CEO Jensen Huang said that his only regret with xAI and Musk is that he “didn’t give him more money.”

“Almost everything that Elon’s part of, you really want to be part of as well,” he added. “He gave us the opportunity to invest in xAI, and I’m just delighted by that.”

By using an SPV, xAI reduces shareholder dilution during a period of heavy fundraising to cover the costs of its aggressive data center buildout. This deal is expected to raise its ongoing funding round to $20 billion.

The deal is just one of several that Nvidia has made to fund the purchase of its own chips, including investments in CoreWeave, Nebius, and Nscale. It also plans to pump as much as $100bn into OpenAI as long as the generative AI company deploys some 10GW-worth of Nvidia chips.

At the same time, OpenAI plans to deploy AMD chips and gain a 10 percent stake in the chip designer in return.