Hewlett Packard Enterprise HPE It has reportedly signed a more than $1 billion deal to provide artificial intelligence-optimized servers for Elon Musk’s social media platform X.
What happened: The deal between HP and X closed late last year, Bloomberg News reported Friday, citing sources familiar with the matter.
These servers are tailored for AI applications, an area that is seeing strong demand from enterprises. Competitor Dell Technologies Inc. Dell and Super Microcomputer Co., Ltd. SMCI also contested the contract.
The market for AI servers is growing, and businesses are increasingly seeking hardware that can support artificial intelligence applications. Companies under Musk’s direction, such as Tesla Inc. TSLA xAI has become a leading customer for such hardware.
Why it matters: Musk’s interest in AI is well documented. In a recent discussion, Musk predicted that AI could reach human-level capabilities by 2029. “It’s safe to say that AI is getting 10x better every year. So four years from now, it’s going to be 10,000x better,” Musk said.
His AI startup, xAI, is also making progress, with Musk announcing that it will soon integrate the Grok chatbot into Tesla cars. Musk shared an update during an X livestream, saying, “Grok in Teslas is coming soon. You can talk to Tesla and ask him anything.”
Meanwhile, Musk’s social media platform X faces competition from rival platform BlueSky, which is said to be valued at nearly $700 million.
Price Action: HPE stock rose 0.23% on Friday, according to data from Benzinga Pro.
The latest analyst ratings for Hewlett Packard Enterprise were issued by Deutsche Bank, Loop Capital, and Barclays on December 19, December 9, and December 6, respectively. The average price target of these companies is $25.33, so the rating suggests an upside potential of 14.01% for the company.
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