Oracle and Musk-owned xAI enter talks over alleged $10 billion server deal
Elon Musk’s xAI will terminate its server lease agreement with the cloud storage Oracle, reportedly after the company deemed Musk’s specification for a supercomputer it was building for him technologically impossible.
Per ReutersxAI leased Nvidia AI-equipped H100 graphics processing units (GPUs) from Oracle, but in a tweet on TwitterMusk said the company was now working on building its own system to ensure “the fastest time to completion.”
xAI and Oracle
Reuters was told by a source close to Oracle that the server capacity it leased to xAI had already been allocated to another company.
But that’s no secret. Twitter account of xAI (through The information) discussed last month’s news that Oracle signed an agreement with Microsoft to provide Nvidia servers for OpenAI workloads.
xAI and Oracle still have an agreement that allows xAI to train its AI models on Oracle’s cloud infrastructure. And according to X’s tweet (we’re not made of money), xAI still leases about 16,000 Nvidia chips from Oracle.
The tweet also confirms that xAI plans to build its own data center in Memphis, Tennessee, powered by Nvidia chips purchased directly from Dell and Supermicro, plus a supercomputer with 100,000 GPUs for the third version of Grok, Twitter’s own ‘spicy’ AI chatbot.
Musk plans to launch the second version of Grok next month.