Elon Musk’s xAI and Oracle have ended talks on their server rental agreement, which was worth $10 billion.
Takeaway Points
- Elon Musk’s xAI and Oracle have ended talks on their server rental agreement, which was worth $10 billion.
- According to X Daily News, the talks broke down due to disagreements over timelines and power supply concerns.
- Elon plans to build a supercomputer with 100,000 Nvidia GPUs for training Grok 3.0.
Why did xAI and Oracle end talks on their server rental agreements?
xAI, Elon Musk’s artificial intelligence startup, has ended talks with the tech giant Oracle on their server rental agreement that was worth $10 billion. This was reported by the Information on Tuesday.
According to X Daily News, the talks broke down due to disagreements over timeline and power supply concerns, and XAI is now building its own AI data center in Memphis, Tennessee.
Elon Musk, CEO of X, said in a post on his social media platform that “xAI contracted for 24k H100s from Oracle and Grok 2 trained on those. Grok 2 is going through finetuning and bug fixes. Probably ready to release next month. xAI is building the 100k H100 system itself for fastest time to completion. Aiming to begin training later this month. It will be the most powerful training cluster in the world by a large margin.
The reason we decided to do the 100k H100 and next major system internally was that our fundamental competitiveness depends on being faster than any other AI company. This is the only way to catch up. Oracle is a great company and there is another company that shows promise also involved in that OpenAI GB200 cluster, but, when our fate depends on being the fastest by far, we must have our own hands on the steering wheel, rather than be a backseat driver.”
The company is buying Nvidia chips from Dell and Supermicro for this project, and Elon plans to build a supercomputer with 100,000 Nvidia GPUs for training Grok 3.0, according to the report.
Michael Rutchland, one of the X users who commented on the post, said that it’s impressive to see that xAI is taking a step towards autonomy and speed in developing AI.
Michael went further to explain, saying, “Building your own 100k H100 system is a testament to your commitment to pushing the boundaries of what’s possible. This move not only highlights your ambition but also underscores the competitive nature of the AI landscape. Your focus on being the fastest AI company is a strategic choice that could lead to significant breakthroughs and advancements in the field. While collaborating with established players like Oracle can be valuable, it’s clear that maintaining full control over your infrastructure is crucial for achieving your goals. By building your own systems, you can ensure optimal performance, customization, and the agility to adapt to the rapidly evolving AI landscape.
This decision is a clear message to the AI community that xAI is a force to be reckoned with, and I’m excited to see what groundbreaking innovations you’ll achieve with this newfound independence.”
The conclusion of talks between Elon Musk’s xAI and Oracle regarding their server rental agreement marks a pivotal moment in the technological landscape. As these discussions conclude, both parties navigate the complexities of next-generation AI infrastructure and its strategic implications.
