Elon Musk's xAI is raising up to $6 billion to acquire GPU technology for a Memphis datacenter.

Elon Musk is purchasing thousands of chips for his artificial intelligence company in Memphis. According to CNBC's David Faber, Musk is raising up to $6 billion to buy 100,000 Nvidia chips for the Memphis data center. The transaction is anticipated to close early next week.

The funding for the chip acquisition comes from two sources: $5 billion from Middle Eastern sovereign funds and $1 billion from other investors, some of whom may choose to reinvest. This financing structure allows Musk to secure the substantial computing infrastructure needed for his AI operations in Tennessee.

xAI is a new artificial intelligence start-up company led by Elon Musk, who also heads Tesla and SpaceX. The company is focused on developing advanced AI capabilities and has articulated a clear mission on its website, stating that it is working on "building artificial intelligence to accelerate human scientific discovery."