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- Bloomberg reports that the contact is for Elon Musk’s social media platform X
- xAi’s Colossus uses 100,000 Nvidia H100 GPUs and doesn’t appear to be part of the contract
- Supermicro has had problems, but is still a major player in AI hardware
The growing demand for computing power to support AI workloads has fueled rapid growth in the market for high-powered servers. It is a lucrative business for companies like DellSupermicro, and Hewlett Packard Enterprise, all of which have seen increased demand for their high-performance server products in recent years.
A report from Bloomberg claims that HPE has secured a massive deal worth more than $1 billion to provide Elon Musk’s X social network with servers optimized for artificial intelligence work.
The report doesn’t specify exactly how the servers will be used, but since it’s for X, there’s a good chance that some of the capacity will be for Grok, the social network’s AI. chatbot. At the end of 2024, X announced that it was rolling out Grok-2 to all users for free, and rightfully concluded that the extra capacity would require more server infrastructure.
Dell and Supermicro outperformed
Bloomberg says X’s deal with HPE was reached at the end of 2024, according to people familiar with the matter.
Musk’s companies, including xAI and Tesla, are big buyers of AI hardware. The Colossus supercomputer, built by xAI in Memphis, had previously been claimed by Musk to be the “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 GPU H100, 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 Watch reports, 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 provided the servers for Colossus originally, and Bloomberg says that while both companies have made offers to supply equipment for this new venture, they have been unsuccessful.
BloombergThe report notes: “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.
