Dell Technologies is reportedly in advanced discussions to finalize a deal exceeding $5 billion to supply AI-optimized servers to Elon Musk’s artificial intelligence startup, xAI. According to reports revealed on Friday, sources familiar with the negotiations revealed that the agreement involves Dell providing servers equipped with Nvidia’s GB200 chips, designed for AI workloads, with deliveries expected within this year.
Dell Stock Gains Amid xAI Partnership News
Following the news, the company’s stock saw a 4% increase, reflecting positive investor sentiment. The specifics of the deal are still under negotiation and could undergo modifications before being finalized.
Neither Dell Technologies nor representatives of Elon Musk have responded to media inquiries regarding the matter. If the deal proceeds as anticipated, it would mark a significant milestone for Dell in the competitive AI infrastructure market, strengthening its position in supplying high-performance computing solutions.
Musk, who founded xAI in 2023, aims to develop advanced AI models to rival existing industry leaders. The company has been expanding its computing capabilities to support large-scale AI research and development. With AI hardware demand surging, technology firms are aggressively securing semiconductor supply to meet growing computational needs. Nvidia’s GB200 chips, known for their efficiency in handling AI tasks, have become a crucial component for enterprises investing in AI infrastructure.
Dell’s potential deal with xAI underscores the intensifying competition in the AI hardware sector, where tech giants are racing to acquire the most powerful chips for AI model training and deployment. If finalized, this agreement could further solidify the company’s role in the expanding AI-driven computing industry.
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