xAI Negotiates $10 Billion Oracle Cloud Deal to Power Next-Generation AI

May 15, 2024 – Exclusive insights from The Information reveal that Elon Musk’s artificial intelligence startup, xAI, is in negotiations with Oracle executives to lease cloud servers worth a staggering $10 billion over the next few years.

The proposed deal, which amounts to approximately 724 billion yuan, rivals the server orders placed by OpenAI and Anthropic. If successful, this transaction would catapult xAI into the ranks of Oracle’s largest customers.

Since its inception in July 2023, xAI has made significant strides, introducing its flagship product, the Grok chatbot, in November last year. Recently, the company showcased its Grok-1.5 Vision multimodal model, capable of processing not just text but also images, documents, and tables.

Notably, it was also reported that xAI is poised to complete its latest round of funding this week, valuing the company at approximately $18 billion (currently equivalent to 1301.4 billion yuan). Sequoia Capital is among the potential investors.

This fresh infusion of capital will enable xAI to acquire more AI computing power, positioning it to compete with rivals like OpenAI and Anthropic. Musk recently disclosed that xAI’s next-generation Grok model is currently being trained on 20,000 NVIDIA H100 GPUs, and the demand for AI GPUs for the upcoming Grok 3 is expected to skyrocket to 100,000 units.

As the AI landscape continues to evolve, xAI’s partnership with Oracle and its aggressive expansion plans could potentially reshape the competitive landscape, underscoring Musk’s vision of leveraging AI to tackle complex scientific and mathematical problems and ultimately “understand” the universe.

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