- Elon Musk’s AI startup xAI and Oracle ended negotiations on a $10 billion server deal due to disagreements over timelines and power supply.
- Following the deal’s collapse, Oracle reassigned the discussed server capacity to another customer but remains receptive to future partnerships with xAI.
OUR TAKE
The abrupt end of Elon Musk’s xAI and Oracle’s $10 billion server deal highlights the complexities of AI innovation and corporate partnerships. Oracle’s hesitance to meet xAI’s demands underscores these challenges. Will xAI find a new ally or push forward alone, reshaping AI’s future? The tech world watches closely.
–Jasmine Zhang, BTW reporter
What happened
Billionaire Elon Musk’s artificial intelligence startup, xAI, and technology giant Oracle have terminated negotiations over a potentially groundbreaking $10 billion deal. The deal, which aimed to rented Nvidia’s advanced AI chips from Oracle’s cloud services, was called off due to irreconcilable differences.
Musk’s ambition to build a supercomputer using Nvidia’s H100 graphics processing units at the fastest possible pace clashed with Oracle’s assessment of realistic timelines. Oracle also expressed concerns about the adequacy of power supply at xAI’s preferred location, further complicating the negotiations.
As a result, the specific server capacity that Oracle had been discussing with xAI has now been contracted to another customer. Oracle stated that it is “always in discussion with customers about upcoming capacity and continues to engage with xAI on its infrastructure needs.”
xAI already has an existing contract with Oracle to train AI models in its Gen2 Cloud platform. The termination of the server deal, while disappointing, does not necessarily signal the end of the two companies’ working relationship.
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Why it’s important
The abrupt termination of Elon Musk’s xAI and Oracle’s ambitious $10 billion server deal has sent shockwaves through the tech industry, sparking debates about the intricacies of AI innovation and the delicate dance of corporate partnerships.
With Musk’s visionary leadership, xAI was poised to disrupt the AI landscape, yet Oracle’s hesitance to align with its demands underscores the challenges of scaling such groundbreaking technology. This failed collaboration underscores the importance of finding compatible partners and navigating the treacherous waters of high-stakes negotiations.
As the dust settles, the question lingers: will xAI rebound with a new ally, or forge ahead independently, reshaping the future of AI in the process? The world of tech eagerly awaits the next chapter in this unfolding story.
