- Bloomberg reports that the contact is for Elon Musk’s X social media platform
- xAi’s Colossus uses 100,000 Nvidia H100 GPUs and does not appear to be part of the contract
- Supermicro has struggled, but remains a major player in AI hardware
Rising demand for computing power to support AI workloads has driven rapid growth in the high-powered server market. It’s a lucrative business for companies like Dell, Supermicro and Hewlett Packard Enterprise, which have seen increased demand for their high-performance server products in recent years.
a report of Bloomberg claims HPE has landed a massive deal worth more than $1 billion to supply Elon Musk’s social network X with servers optimized for AI work.
The report does not specify exactly how the servers will be used, but since it is for X, it is very likely that some of the capacity will be for Grok, the social network’s artificial intelligence chatbot. In late 2024,
Dell and Supermicro outbid
Bloomberg says X’s deal with HPE was reached in late 2024, according to people familiar with the matter.
Musk’s companies, including xAI and Tesla, are major buyers of AI hardware. Musk previously stated that the Colossus supercomputer, built by xAI in Memphis, was the “most powerful AI training system in the world.” The billionaire claimed 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 faced some challenges recently, including the resignation of its auditor and other related matters. However, as Market surveillance reports, remains a “major player in the AI revolution” and recently established operations in Memphis to support xAI’s goal of building a 1 million GPU supercomputer facility.
Supermicro and Dell originally provided the servers for Colossus, and Bloomberg He says that while both companies bid to supply the equipment for this new venture, they were ultimately unsuccessful.
BloombergThe report notes that “HPE’s liquid cooling technology may have played a role in the victory,” wrote Woo Jin Ho, an analyst at Bloomberg Intelligence. While good for sales, larger deals can be a drag on margins, he added.”
