Michael Dell Show Bitcoin Interest Amid Partnership With Nvidia

Amidst a $3 billion AI factory contract with Nvidia for Musk’s xAI, Michael Dell, CEO of Dell Technologies (DELL), expresses interest in Bitcoin.

TakeAway Points:

  • Michael Dell, CEO of Dell Technologies (DELL), tweeted a piece by proponent of bitcoin Michael Saylor, suggesting that he may be interested in the cryptocurrency.
  • Saylor’s MicroStrategy (MSTR) has invested $15 billion, or 226,331 BTC, and is pushing other companies to follow suit.
  • Bitcoin is not yet included in Dell Technologies’ treasury assets, despite the company having $5.8 billion in cash and equivalents.

Michael Dell gets interested in Bitcoin

Michael Dell’s recent behaviour on social networking site X suggests that he is beginning to exhibit interest in Bitcoin.

On Thursday, Dell posted, “Scarcity creates value,” which prompted a response from Bitcoin evangelist and MicroStrategy Executive Chairman Michael Saylor. Saylor replied, “Bitcoin is Digital Scarcity,” a post that Dell then recirculated. 

The interaction continued with Dell sharing an image of Sesame Street’s Cookie Monster, altered to depict the character consuming Bitcoin instead of cookies, a playful nod to the cryptocurrency.

Saylor has been a prominent figure in the Bitcoin community, leading MicroStrategy to acquire 226,331 Bitcoin worth $15 billion over nearly four years. The latest acquisition was 11,900 BTC just this week. Saylor has also encouraged other corporations to adopt Bitcoin as part of their treasury strategies, although few have followed suit to the extent that MicroStrategy has. Dell Technologies, with $34.6 billion in current assets and $5.8 billion in cash and cash equivalents as of May 3, has not yet included Bitcoin in its balance sheet.

Dell’s Collaboration with Nvidia

In a significant development, Dell Technologies announced its collaboration with Nvidia to build a “Dell AI factory” for Elon Musk’s AI startup, xAI. 

“We’re building a Dell AI factory with Nvidia to power Grok for xAI.” Michael Dell revealed this partnership in an X post.

Musk confirmed that Super Micro Computer Inc. would also be providing servers for the project. Dell’s XE 9680 servers will be utilized in the factory, which aims to leverage Dell’s extensive solutions to train AI models more efficiently.

Both Dell and Super Micro are ramping up their server capacities to cater to the growing demand for AI programs, which require substantial data processing power. Super Micro recently announced plans to add three new facilities in Silicon Valley to support AI growth. 

Dell reported that its revenue from AI-capable servers more than doubled last quarter, with a significant backlog of orders. Bloomberg Intelligence analyst Woo Jin Ho estimated that the xAI server deal could be worth $3 billion, assuming a price of $1 million per AI-server rack.

Market Responses

The market responded positively to these announcements. Dell Technologies’ shares rose about 1% to $150.63, after earlier gaining as much as 8.3%. Super Micro’s shares jumped 8.2% to $995.45, following a previous increase of 10%. Nvidia also saw a 2.5% rise in its stock price, reaching $138.94. 

The collaboration with xAI, which Musk launched in July 2023 as a competitor to OpenAI’s ChatGPT, underscores the growing importance of AI in the tech industry. xAI’s Grok, a ChatGPT competitor, launched last November and has already raised $6 billion in venture capital funding at a pre-money valuation of $18 billion.

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