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

Dell Technologies is in advanced discussions to secure a deal exceeding $5 billion to provide servers optimized for artificial intelligence to Elon Musk's AI startup, xAI. The servers will be equipped with Nvidia GB200 semiconductors, and delivery is expected within the year, according to Data Center Dynamics.

The demand for high-powered servers to run AI workloads has surged, benefiting companies like Dell, Super Micro Computer, and Hewlett Packard Enterprise. Musk's ventures, including Tesla and xAI, have become significant customers for such hardware.

Dell's shares experienced a notable increase, rising as much as 6% following the news. The company has been actively involved in building xAI's supercomputer project in Memphis, deploying tens of thousands of GPUs there. This deal is expected to further solidify Dell's position as a leading provider of AI servers.