Elon Musk’s xAI Eyes $10 Billion Oracle AI Server Deal


Elon Musk’s artificial intelligence startup, xAI, is in advanced discussions with Oracle Corporation (NYSE:ORCL) about a $10 billion agreement to lease cloud servers over several years, according to a report by The Information. The potential deal, still under negotiation with no final agreement guaranteed, would position xAI as one of Oracle’s most significant customers.

This strategic move is part of Musk’s broader effort to secure funding for xAI, aiming to compete with major AI players like OpenAI and Google. Last month, xAI was reportedly negotiating to raise $3 billion in funding, which would value the startup at $18 billion.

Oracle, co-founded by Larry Ellison who is a noted close friend of Musk, had previously announced in September that Musk’s company would be using Oracle’s Gen2 Cloud to train AI models. This relationship is underscored by recent enhancements Oracle made to its database technologies, optimizing them for AI applications.

Additionally, xAI is already a major user of Oracle’s AI resources, being the largest customer of Oracle’s H100 AI chips—manufactured by Nvidia—utilizing over 15,000 units.

Musk also revealed plans last month for xAI to launch an upgraded version of its chatbot, Grok, to early testers and users on his social media platform, X. Oracle and Elon Musk have not yet responded to requests for comment regarding the ongoing discussions.

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