Dell Technologies is close to finalizing a deal worth over $5 billion to supply Elon Musk’s artificial intelligence startup, xAI, with high-performance servers designed for AI workloads.
Dell Technologies will be providing xAI with servers equipped with Nvidia’s GB200 semiconductors, which are among the most advanced AI chips available. These servers are expected to be delivered later this year, Bloomberg news report said.
This deal highlights the ongoing surge in demand for AI-optimized servers, as enterprises and tech companies race to secure the hardware necessary to power complex artificial intelligence applications.
Elon Musk’s ventures, including xAI and Tesla, have increasingly relied on advanced computing hardware to support their AI initiatives.
In December, the Greater Memphis Chamber revealed that xAI plans to significantly expand its Memphis-based supercomputer, Colossus, aiming to house at least one million GPUs. This represents a ten-fold increase from its current capacity of 100,000 GPUs, which are being used to train xAI’s AI chatbot, Grok.
Nvidia, Dell, and Super Micro, which are responsible for assembling the server racks for Colossus, are expected to establish operations in Memphis, Reuters news report said.
Dell’s involvement in this deal places it among the key suppliers fueling the AI boom, joining other tech giants like Hewlett Packard Enterprise (HPE).
Last month, Bloomberg News reported that HPE had secured a deal worth more than $1 billion to supply Musk’s social media platform, X, with AI-optimized servers. These developments illustrate how major hardware providers are capitalizing on the growing AI revolution, with companies like xAI, Tesla, and X emerging as major customers in the rapidly evolving AI infrastructure landscape.
