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Welcome back, Kate and Natasha here. Few are as skilled, and quick, as Elon Musk at raising capital—billions of dollars, no less. But if there's one constant in Musk's fundraising strategy, it's that he often changes the details of a round at the last minute. Take the latest process to raise money for his 18-month-old artificial intelligence startup, xAI. Representatives of the startup, including Musk's right-hand man, Jared Birchall, have been talking to investors about another megafinancing expected to value the company at around $45 billion, we reported. Musk's usual backers have been in talks to invest, including Valor Equity Partners, Sequoia Capital, Andreessen Horowitz and Vy Capital. However, sources tell us xAI could raise mostly from strategic investors, potentially spurning some venture capital backers. So which corporation might buy in? Our guess is Nvidia. XAI and the semiconductor designer are already tight. Earlier this month, Nvidia CEO Jensen Huang called Musk "superhuman" while applauding his ability to build a cluster of 100,000 Nvidia H100 graphics processing units in Memphis to train and run AI models in only 19 days. "As far as I know, there is only one person in the world that could do that," Huang said. "Elon is singular in his understanding of engineering and construction and large systems and marshaling resources. It's unbelievable." Investing in xAI would keep Nvidia close to the fast-growing AI company. Nvidia already works more directly with the startup than with others, such as Anthropic and OpenAI, which primarily access GPUs by renting them from cloud providers like Microsoft or Amazon Web Services. Since Musk owns and runs his own data center in Memphis, Nvidia has the ability to not only sell him chips, but also influence xAI's decisions to buy networking equipment and other supplies for the supercomputer. Nvidia and Musk have said they plan to double the size of the GPU cluster to 200,000. If those chips were all connected in a single chip cluster, it would be one of the largest in the world. But xAI is likely to need far more. For instance, Microsoft has promised OpenAI access to 300,000 of Nvidia's most advanced chips by the end of the 2025. There is precedent for a deeper relationship between Nvidia and xAI. Microsoft's $13 billion investment in OpenAI, which has come as a mix of cash and credits on Microsoft's Azure, essentially meant Microsoft has been financing OpenAI's compute needs. Nvidia hasn't done the same kind of landmark deal—but it has become one of most active investors in AI startups over the last two years. Often it backs companies that are also its customers. OpenAI, for instance, spends billions of dollars annually on renting servers from Microsoft that have Nvidia chips. Nvidia invested in OpenAI's recent financing, which valued the company at $157 billion. The chip giant has also funded several of OpenAI's competitors, including Cohere, Adept and Aleph Alpha, a German model developer. Mostly, Nvidia isn't leading deals, which has allowed it to play nice with the VC firms that want a piece of these emerging AI startups. But if Nvidia takes a big chunk of Musk's latest fundraising, it may not be welcome news among the frequent Musk backers that are hoping to increase their xAI stake. Anissa Gardizy contributed to this newsletter. | 
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