Elon Musk’s AI company xAI has reportedly finalized a $10 billion server deal with tech giant Oracle, leasing Nvidia’s AI chips to train the Grok 2 chatbot. Musk confirmed that the company has leased 24,000 Nvidia H100s GPUs from Oracle for this purpose. The new AI chatbot is set to debut in August after some bug fixes and tweaks are completed.
In addition to this deal, Musk revealed that xAI is building its own data center using Nvidia’s H100 graphics processing units. The company aims to have the system up and running by the end of the month to begin training, positioning itself as having the strongest training group in the world. Musk emphasized the importance of speed and competitiveness in the AI industry, hence the decision to develop the 100k H100 system in-house. The upcoming Grok 3 is also expected to be launched later this year.
The report also touched on the reasons why xAI decided to end its contract with Oracle, citing differences in expectations regarding the speed and capabilities of the supercomputer being planned. Musk expressed the company’s need to be the fastest in the industry, leading to the decision to take control of their infrastructure development rather than relying on external partners. Oracle, on the other hand, mentioned concerns about power supply in xAI’s preferred location.
Despite the end of the negotiations with Oracle, the company remains in contact with xAI regarding future capacity needs. While Oracle discussed outsourcing specific capabilities to another customer, xAI is focused on building its own infrastructure to maintain its competitive edge in the AI market.
Overall, Elon Musk’s xAI company is making significant moves in the AI industry by securing server deals, developing cutting-edge technology in-house, and focusing on maintaining its position as a leader in AI innovation. The launch of Grok 2 and the upcoming Grok 3 signals the company’s commitment to pushing the boundaries of AI technology and staying ahead of the competition.
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https://timesofindia.indiatimes.com/technology/tech-news/why-elon-musks-ai-company-has-ended-10-billion-server-deal-with-oracle/amp_articleshow/111633880.cms