Apollo Leads $3.5 Billion AI Infrastructure Financing To Power Elon Musk's xAI

Apollo Global Management (NYSE:APO) has led a $3.5 billion financing package for Valor Compute Infrastructure (VCI), a fund run by Valor Equity Partners. This money will help fund a $5.4 billion acquisition and lease of data-center infrastructure, including Nvidia Corp‘s (NASDAQ:NVDA) GB200 GPUs, to a subsidiary of Elon Musk's artificial intelligence company, xAI. The deal is structured as a triple‑net lease and is intended to support xAI's ongoing model training and the development of Grok, its AI chatbot, Apollo said in a statement. Nvidia is an anchor investor in VCI, joining a group of Valor's institutional backers. Since launching in 2023, xAI has quickly become one of the more prominent players in the AI race, with its latest model, Grok 4, posting strong benchmark results. "This transaction represents a hallmark, downside-protected investment for Apollo in the AI infrastructure space and underscores our role as a leading provider of flexible, asset-based capital for next-generation assets," said Apollo Partner Christopher Lahoud in the statement. "We are supporting the growth of this transformative technology by investing in the critical infrastructure that enables it, alongside highly regarded partners like Valor and NVIDIA, who are driving the next wave of innovation." Antonio Gracias, Valor Founder, CEO and CIO added, "VCI is an extension of our continued service as a firm to xAI. The fund provides investors with the opportunity to invest in critical artificial intelligence compute infrastructure with quarterly cash distributions and upside through ownership of the compute assets." Apollo estimates that global data center infrastructure will require several trillion dollars of investment over the next decade, driven by secular trends associated with the Global Industrial Renaissance and accelerating demand for compute capacity and AI workloads. Since 2022, Apollo-managed funds and affiliates have deployed over $40 billion into next-generation infrastructure, including compute capacity, digital platforms and renewable energy. Latham & Watkins LLP served as legal counsel to the Apollo Funds, Proskauer Rose LLP served as legal counsel to VCI and Sullivan & Cromwell LLP served as legal counsel to xAI. Photo: Shutterstock