Elon Musk’s artificial intelligence (AI) startup Xai is approaching finalizing its deal with Dell Technologies, the report claims. Under this agreement, worth more than $5 billion, Dell could potentially provide companies developing ChatGpt rival Grok chatbots to companies that develop servers optimized for AI work.
The Bloomberg report cited an anonymous source familiar with the issue claiming it includes transactions that include the sale of servers with NVIDIA GB200 semiconductors in high demand for AI workloads. The report also noted that some details of the transaction are currently finalised and could change in the coming days.
According to the report, Xai’s supercomputer project in Memphis also incorporates a combination of Dell and Super Micro servers. In December 2024, Dell announced it had deployed tens of thousands of GPUs on its site, aiming to secure a large portion of the remaining buildouts.
GPUs are essential to power AI workloads, and Nvidia is the leading manufacturer of these processors.
Analysts also predict that Dell shipped over $10 billion in AI servers in the fiscal year ended last month, rising to $14 billion by January 2026. Dell is scheduled to release its fourth quarter revenue on February 27th. Server businesses are an important focus for investors.
Bloomberg analyst Woo Jin Ho said the Xai contract would “encourage the company to establish and sell more firmly as a major AI server provider, but the impact on profitability is not very clear.” .
Elon Musk’s Xai will release Grok 3 soon
Elon Musk is set to unveil the Grok 3, dubbed “The Smartest AI on Earth” at a live demonstration on Monday (February 17) at 8pm (Tuesday, Feb. 18 at 9:30am).
Developed by Xai using Colossus SuperComputer and 100,000 Nvidia GPU time, the Grok 3 features a synthetic dataset and self-correction to improve accuracy.
Musk claims to be better than existing models and three times faster than the Grok 2. The launch follows growing competition in the AI sector, including China’s Deepseek R1 model.
