Dell Technologies Nears $5 Billion AI Server Deal with Elon Musk's xAI

Dell Technologies and xAI Set to Finalize $5 Billion Deal

This deal adds to yet another thread in hardware firms bonding with AI software firms. These enhancement models, such as xAI, require strong infrastructure to deliver the demand for faster, more intelligent models. It further strengthens the symbiotic relationship between Dell and Nvidia, along with xAI. This deal symbolizes not only a business agreement but an actual historical moment in the future development of next-generation artificial intelligence as the race intensifies. As clear market demand creates shrinking space for dependability and power in infrastructure, Dell continues to make a profit from AI server business. The next step for xAI in the direction of its ambitious AI goals comes with the acquisition of top-loading new servers. Thus, the deal will likely transform the future landscape of AI hardware as the groundwork laid for forthcoming breakthroughs is prepared.

Dell Nears USD 5 Billion AI Server Deal with xAI: Report

Nvidia, Dell, and Super Micro are expected to set up operations in Memphis to support AI growth. Dell Technologies (Dell) is finalising a deal worth over USD 5 billion to supply Elon Musk's AI startup, xAI, with servers optimised for artificial intelligence (AI) workloads. Dell is expected to deliver servers equipped with Nvidia's GB200 semiconductors to xAI this year, Bloomberg News reported on February 15, 2025, citing sources. Also Read: xAI Raises USD 6 Billion in Series C Funding Some details are still being discussed and may change, the report added. The deal aligns with xAI's expansion of its Memphis-based Colossus supercomputer, which aims to scale from 100,000 to over one million GPUs. Nvidia, Dell, and Super Micro are expected to establish operations in Memphis to support this growth. Also Read: HPE Secures USD 1 Billion AI Server Deal with X: Report The surge in demand for AI infrastructure has driven major investments, with Hewlett Packard Enterprise recently securing a USD 1 billion deal to supply AI servers for Musk's social media platform, X. Dell and other AI hardware providers continue to benefit from this trend as companies race to build high-performance computing systems.

Report: Dell close to inking $5B+ AI server deal with xAI - SiliconANGLE

Dell Technologies Inc. could sell more than $5 billion worth of artificial intelligence servers to xAI Corp., Bloomberg reported today. The paper's sources said that discussions about the potential deal are in an advanced stage. However, they cautioned that the transaction terms could still change. Launched by Elon Musk in March 2023, xAI develops a family of large language models called the Grok series. The LLMs are available through an eponymous chatbot and an application programming interface. To support its development efforts, xAI has built an AI-optimized supercomputer called Colossus in Memphis. The system came online last September with 100,000 Nvidia Corp. graphics processing units. Dell has supplied tens of thousands of the GPU-equipped servers that power Colossus. In December, the hardware maker revealed that it hopes to supply an "unfair share" of the GPU servers xAI will add to the supercomputer down the road. Following a $6 billion funding round in December, xAI revealed that it's working to double Colossus' GPU count to 200,000 chips. The company's long-term goal is to increase that number to one million. According to Bloomberg, the servers that Dell would supply for Colossus under the deal it's discussing with xAI are based on Nvidia Corp.'s GB200 design. The system (pictured) includes 36 of the chipmaker's GB200 Grace Blackwell Superchips. Each such processor features one Grace central processing unit and two Blackwell B200 GPUs. Grace features 72 cores with a clock speed of 3.2 gigahertz. Those cores are based on Arm Holdings plc's Neoverse V2 core design, which is optimized for use in data centers. The Blackwell B200, the other component of the GB200 Grace Blackwell Superchip, is Nvidia's newest and most capable GPU. It features 208 billion transistors made using Taiwan Semiconductor Manufacturing Co.'s four-nanometer process. The chip stores AI models' data in an onboard DRAM pool with 192 gigabytes of capacity. The CPU and two GPUs in GB200 Grace Blackwell Superchip are linked together by a technology called Nvidia-C2C. It can transfer data at speeds of up to 900 gigabits per second. That's seven times the throughput provided by PCIe 5, an industry-standard technology for linking together chip. Another key selling point of Nvidia-C2C is that it provides memory coherence. The technology reduces the need to copy data between the CPUs and GPUs in an AI cluster, which speeds up processing. It also makes it easier for developers to configure the hardware. The 36 GB200 Grace Blackwell Superchips in the GB200, the server at the center of Dell's potential deal with xAI, are stored in 16 trays. Those trays each provide up to 80 petaflops of performance. The heat they generated is dissipated by cold plates, which are flat metal plates connected to a liquid cooling system. It's believed Dell could deliver the servers to xAI later this year. Analysts cited by Bloomberg estimate that the hardware maker's AI server sales could reach $14 billion in 12 months through January 206, which would represent a 40% year-over-year increase. Dell shares closed 3.75% higher today on the report.

Dell Nears $5 Billion AI Server Deal for Elon Musk's xAI

Dell Technologies Inc. is in advanced stages of securing a deal worth more than $5 billion to provide Elon Musk's xAI with servers optimized for artificial intelligence work. The company will sell servers containing Nvidia Corp. GB200 semiconductors to Musk's AI startup for delivery this year, according to people familiar with the matter, who asked to not to be named because the work is private. Some details are being finalized and still may change, some of the people added.

Dell Nears $5 Billion AI Server Deal for Elon Musk's xAI

(Bloomberg) -- Dell Technologies Inc. is in advanced stages of securing a deal worth more than $5 billion to provide Elon Musk's xAI with servers optimized for artificial intelligence work. The company will sell servers containing Nvidia Corp. GB200 semiconductors to Musk's AI startup for delivery this year, according to people familiar with the matter, who asked to not to be named because the work is private. Some details are being finalized and still may change, some of the people added. Demand for computing to run AI workloads has led to a boom for makers of high-powered servers like Dell, Super Micro Computer Inc. and Hewlett Packard Enterprise Co. Musk's companies, including carmaker Tesla Inc. and xAI, have emerged as major customers for the hardware. Dell and Nvidia declined to comment. xAI didn't respond to a request for comment. Dell shares jumped as much as 6% to $116.88 Friday on the news before paring some gains. The stock had slipped 4.3% this year through Thursday's close. A supercomputer project being built by xAI in Memphis has used a mix of Dell and Super Micro servers. In December, Dell said it had deployed tens of thousands of graphics processing units, or GPUs, there and was working to win an "unfair share" of the remaining build-out. GPUs are the key chips to power AI workloads and Nvidia is the top maker of those processing units. Analysts expect Dell will have shipped more than $10 billion of AI servers in the fiscal year ending last month and project that value will jump to $14 billion in the fiscal year ending in January 2026. Dell is scheduled to report fiscal fourth-quarter earnings on Feb. 27, with the AI server business a major focus for investors. The deal with xAI "would firmly establish the company as a leading AI-server provider and boost sales, though the impact on profitability is less clear," wrote Woo Jin Ho, an analyst at Bloomberg Intelligence. AI startup xAI's main product, a chatbot called Grok, has primarily been available to paying users of X, the social network formerly known as Twitter. Firms that Musk runs are known to share employees, technology and computing power. --With assistance from Ian King and Kurt Wagner. (Updates with comments from analyst in the eighth paragraph.)

Dell nears deal to sell $5 billion in AI servers to xAI, Bloomberg News reports

Feb 14 (Reuters) - Dell Technologies is nearing a deal worth more than $5 billion to provide Elon Musk's xAI with servers optimized for artificial intelligence work, Bloomberg News reported on Friday, citing people familiar with the matter. Shares of the server maker gained 4% after the report. The company will sell servers containing Nvidia's GB200 semiconductors to the AI startup for delivery this year, the Bloomberg report said, adding that details are still being discussed and may change. Dell and representatives for Musk, who owns xAI, did not immediately respond to Reuters' requests for comment. (Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)

Dell shares pop on report of $5 billion deal for AI servers for Elon Musk's xAI

Dell shares jumped to a session high on Friday following a report saying Elon Musk's startup xAI was getting ready to agree to buy $5 billion in artificial intelligence servers from the hardware maker. The equipment would contain Nvidia's GB200 graphics processing units, according to Bloomberg, which cited unnamed sources. Many data center gear manufacturers have been seeing growth from selling boxes for training and running AI models. Dell said in November that it had $3.6 billion in quarterly AI server order demand. Dell's total revenue for the quarter ended Nov. 1 totaled $24.37 billion, up 10% year over year. In December xAI announced a $6 billion funding round. CNBC reported that the Musk startup was raising the money to purchase GPUs. The Grok assistant from xAI is available for people to use on the Musk-owned social network X. Read the full Bloomberg report here.

Dell Stock Rises on Report of $5B AI Server Deal Talks With Elon Musk's xAI

Dell Technologies (DELL) shares rose Friday following a report the PC maker is nearing a $5 billion AI server deal with Elon Musk's xAI. The deal between Dell and Musk's AI startup is still being finalized, with xAI potentially poised to buy more than $5 billion of servers powered by Nvidia (NVDA) GB200 chips, Bloomberg reported Friday. Dell declined to remark on the report, but could be asked about it by Wall Street analysts when it reports earnings later this month on Feb. 27. Musk's xAI did not immediately respond to a request for comment. The companies have partnered before, with Musk and Dell executives saying last summer that Dell would provide hardware for the AI "supercomputer" the company was planning to build in Memphis, Tennessee. Dell COO Jeff Clarke told Bloomberg in December the company had shipped "tens of thousands" of graphics processing units to the location. Dell shares gained about 4% to close at $114.38 Friday, and have added over a third of their value in the last 12 months.