Elon Musk's xAI is working with a financier to secure $12 billion in debt to fund its Colossus 2 data center and its GPU compute.

The Wall Street Journal reports that the generative AI business is working with investment firm Valor Equity Partners to secure the funds, just weeks after the company raised $10bn.

Some lenders want the debt to be repaid within three years and a cap to be placed on total debt raised, but terms of the deal are still being negotiated.

On X, which is part of xAI, CEO Musk said: "230k GPUs, including 30k GB200s, are operational for training Grok xAI in a single supercluster called Colossus 1 (inference is done by our cloud providers).

"At Colossus 2, the first batch of 550k GB200s & GB300s, also for training, start going online in a few weeks."

After deploying too many natural gas generators at its first Colossus data center in Memphis, Tennessee, contravening local restrictions, xAI this week purchased a former natural gas power plant close to the site of its new data center, in the Southaven area of the city.

Earlier this month, DCD reported that the company is also looking to develop its own semiconductors.