Elon Musk’s xAI, a budding artificial intelligence firm, is reportedly in advanced discussions to lease cloud servers worth approximately $10 billion from Oracle (NYSE:ORCL), according to The Information. A source involved in the negotiations revealed that the long-term deal could rank xAI among Oracle’s top clientele. Musk is orchestrating this move as part of his broader strategy to gather financial backing for xAI, aiming to compete with the AI technologies developed by companies like OpenAI and Google.
The ongoing discussions have not yet solidified into a definitive agreement, with uncertainties still looming over the potential collaboration.
Previously, xAI engaged in fundraising efforts, seeking $3 billion last month in a round that would place the startup’s valuation at $18 billion.
Inquiries to Oracle and Elon Musk for comments by Reuters remained unanswered at the time of the report.
Larry Ellison, co-founder of Oracle and a confidant of Musk, disclosed in September that xAI had agreed to utilize Oracle’s Gen2 Cloud for training its AI models. This announcement coincided with Oracle’s recent enhancements to its database technology, tailored to augment AI compatibility.
Additionally, The Information highlighted xAI as Oracle’s largest consumer of the H100 AI chips from Nvidia, utilizing over 15,000 units.
Musk announced last month that xAI is set to introduce an updated version of its AI chatbot, Grok, to early testers and existing users on his social platform X.
Featured Image: Freepik
