KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Key Takeaway: Elon Musk’s AI venture xAI is expanding its ongoing funding round to US$20 billion, with major backers including Nvidia, Apollo Global Management, and Diameter Capital, underscoring Wall Street’s growing appetite for AI infrastructure investments.
Deal Overview
xAI is reportedly doubling its fundraising target to US$20 billion (RM84.4 billion), combining US$7.5 billion in equity and up to US$12.5 billion in debt through a special purpose vehicle (SPV), according to Bloomberg sources.
The SPV will purchase Nvidia processors and lease them to xAI for its Colossus 2 data center in Memphis over five years. This structure allows financiers to recoup returns through hardware-backed rental income, reducing direct corporate exposure.
Nvidia’s Strategic Role
Nvidia (NVDA.US) is contributing up to US$2 billion in the equity tranche. The investment is part of the chipmaker’s broader strategy to accelerate AI adoption by supporting partners’ infrastructure buildouts.
Nvidia CEO Jensen Huang told CNBC he was “delighted” to invest in xAI, adding:
“Almost everything that Elon’s part of, you really want to be part of as well. My only regret is not giving him more money.”
Nvidia has emphasized its intention to deploy cash flow into AI expansion, with CFO Colette Kress previously noting that the company prioritizes funding ecosystem growth over stock buybacks.
Key Participants
Equity investors: Valor Capital (lead), Nvidia, Apollo Global Management.
Debt participants: Apollo Global Management, Diameter Capital Partners.
Valor is leading the equity portion, while Apollo and Diameter are structuring the debt financing. The SPV model could serve as a template for capital-intensive AI ventures seeking to limit balance sheet leverage.
Broader Industry Context
The xAI fundraising adds to a wave of mega-deals in AI infrastructure financing:
OpenAI recently inked a multi-year supply deal for AMD chips.
Meta Platforms (META.US) secured a US$29 billion data center financing package.
Oracle (ORCL.US) raised US$38 billion in debt for its cloud buildout.
Tech firms have raised roughly US$157 billion in U.S. bond markets this year — 70% higher year-on-year, reflecting investor conviction in AI’s long-term potential.
xAI’s Capital Needs
Despite raising US$10 billion earlier this year, xAI is still burning through ~US$1 billion per month as it scales its AI infrastructure and research operations.
Musk has drawn funding from across his business empire, including SpaceX, and Tesla (TSLA.US) shareholders will vote later this year on whether to invest in xAI directly.
xAI positions AI as the core of Musk’s long-term vision, underpinning future products such as self-driving vehicles and autonomous humanoid robots.
Outlook
The US$20 billion raise highlights how AI capital formation is shifting toward hardware-backed financing and data center expansion.
Implications for investors:
Nvidia: Strengthens ecosystem dominance and GPU demand visibility.
xAI: Gains critical runway to scale Colossus 2 and expand model development.
AI infrastructure sector: May see more SPV-based funding models to manage debt risk.
Bottom line: Musk’s xAI deal underscores the AI industry’s escalating capital intensity — and how strategic partnerships between chipmakers, financiers, and AI labs are reshaping the funding landscape.
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