- Bloomberg reports that the contact concerns Elon Musk’s social media platform
- xAi’s Colossus uses 100,000 Nvidia H100 GPUs and doesn’t appear to be part of the deal
- Supermicro has had problems, but remains a major player in AI hardware
The growing demand for computing power to support AI workloads has fueled rapid growth in the high-power server market. It’s a lucrative business for companies like Dell, Supermicro and Hewlett Packard Enterprise, all of which have seen increased demand for their high-performance server products in recent years.
A report of Bloomberg claims HPE has struck a massive deal worth more than $1 billion to provide Elon Musk’s Social Network X with servers optimized for artificial intelligence work.
The report doesn’t specify exactly how the servers will be used, but since it’s X, there’s a good chance some of the capacity will be for Grok, the social network’s AI chatbot. In late 2024, X announced that it was rolling out Grok-2 for free to all users, and it’s fair to conclude that additional capacity will require more server infrastructure.
Dell and Supermicro outbid
Bloomberg indicates that X’s deal with HPE closed in late 2024, according to people familiar with the matter.
Musk’s companies, including xAI and Tesla, are major buyers of AI hardware. The Colossus supercomputer, built by xAI in Memphis, had already been declared by Musk to be “the most powerful AI training system in the world”. The billionaire said it was built “from start to finish” in just 122 days.
Colossus uses 100,000 Nvidia H100 GPUs, but there are plans to massively expand its operations. Supermicro has been facing some challenges recently, including the resignation of its auditor and other related issues. However, as Market monitoring reports that it remains a “major player in the AI revolution” and recently established operations in Memphis to support xAI’s goal of building a supercomputer facility with 1 million GPUs.
Supermicro and Dell initially provided Colossus’ servers, and Bloomberg says that although both companies bid to provide the equipment needed for this new venture, they were ultimately unsuccessful.
BloombergThe report notes: “HPE’s liquid cooling technology may have played a role in this victory,” wrote Bloomberg Intelligence analyst Woo Jin Ho. While good for sales, larger transactions can weigh on margins, he added.
