Billionaire Elon Musk’s artificial intelligence startup xAI and tech giant Oracle have ended talks on a potential billion server deal, according to a report from The Information. The startup had been leasing Nvidia’s artificial intelligence chips to the cloud provider under an existing agreement, but talks to expand that deal have now been terminated. Musk’s xAI is now working on building a system using Nvidia’s H100 graphics processing units independently. Oracle was considering a multi-year deal to lease Nvidia processors for a planned supercomputer, but talks were stalled due to Musk’s demands for a faster supercomputer and concerns about power supplies at xAI’s preferred location. Despite the end of these specific talks, Oracle continues to engage with xAI on its infrastructure needs, according to a source familiar with the matter. xAI already has a contract to train AI models on Oracle’s Gen2 cloud platform.
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