- Dell is near securing a $5 billion AI server take care of Elon Musk’s xAI
- The servers, that includes Nvidia GB200 chips, might help xAI’s supercomputer
- Analysts predict Dell’s AI server income may hit $14 billion by 2026
We just lately reported HPE had crushed Supermicro and Dell Applied sciences to win a $1 billion contract to produce servers optimized for AI work to Elon Musk’s X, doubtlessly to energy Grok, the social community’s AI chatbot.
On the finish of 2024, X introduced it was rolling out Grok-2 to all customers without spending a dime, and dropping out to HPE would have been an enormous blow to Dell, which, together with Supermicro, did bid to produce the tools however was finally unsuccessful.
Nevertheless, if a brand new report from Bloomberg is correct, the enduring laptop maker may very well be on the verge of successful a fair greater contract from one in every of Musk’s different ventures, xAI.
Memphis sure?
The report says that Dell is near finalizing a deal value over $5 billion to produce AI-focused servers outfitted with Nvidia GB200 chips. Some elements are nonetheless being labored out, sources aware of the discussions advised the information website, but when all goes forward – and it absolutely will – the servers are set to be delivered later in 2025.
Elon Musk beforehand stated, “The desk stakes for being aggressive in AI are a minimum of a number of billion {dollars} per yr at this level,” and he is clearly paying to play.
Fairly what the servers are for isn’t reported, nevertheless it’s very probably that almost all, if not all of them, might be for xAI’s supercomputer undertaking, generally known as “Colossus,” which is being inbuilt Memphis utilizing a mixture of Dell and Supermicro servers. By all accounts, Dell has been very eager to produce the remainder of the servers to complete the job.
This take care of xAI will “firmly set up the corporate as a number one AI-server supplier and enhance gross sales, although the influence on profitability is much less clear,” Bloomberg Intelligence analyst Woo Jin Ho famous.
“Analysts count on Dell may have shipped greater than $10 billion of AI servers within the fiscal yr ending final month and undertaking that worth will bounce to $14 billion within the fiscal yr ending in January 2026,” Bloomberg added, noting Dell is about to to report its fiscal fourth-quarter earnings on February 27.