📣 xAI and Oracle: $10 Billion Deal Falls Through

posted  10 Jul 2024
Photo - xAI and Oracle: $10 Billion Deal Falls Through
xAI, a company specializing in building artificial intelligence, failed to reach an agreement with Oracle to expand its computing capacity lease. The deal faltered due to unrealistic deadlines set by Elon Musk and potential issues with the power supply at the site proposed by xAI staff.

The urgency from the AI developer stems from its efforts to build its own data center, leading it to purchase any available chips. Musk aims to acquire 100,000 Nvidia GPUs to train the new version of Grok 3 (with the second version scheduled for release by summer's end). Previously, Oracle supplied him with 16,000 chips and the contract remains in effect for now.
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,
Elon Musk remarked.
The new deal was estimated at approximately $10 billion. According to sources from Reuters, all the capacity Oracle was talking about with xAI has been contracted to another client. However, the company remains open to future collaborations with xAI on various issues, including technical infrastructure.