The TV show judge is said to have spent around $500,000 (£320,000) on five-star hotels in Miami for the remaining hopefuls, reports The Sun.
160 contestants have been put up in the five-star Mondrian, Delano and Shore Club hotels, which overlook the beaches of South Beach during the show's Boot Camp stage.
An insider said: "Singers on the British version of the show will be green with envy but Cowell stumped up $500,000 putting everyone up in plush hotels in Miami for boot camp.
"He wanted to give them a taste of the celebrity lifestyle and help propel them on to great things."
Simon Cowell recently revealed that he gets on better with Britney Spears than fellow new judge Demi Lovato.
The X Factor USA's second season will debut this September on Fox.