Key points: xAI and oracle end talks on $10 billion server deal.


  • Elon Musk’s xAI: A startup focused on artificial intelligence, utilizing Nvidia’s H100 graphics processing units.
  • Oracle: A leading cloud provider that rents out Nvidia’s AI chips.

Initial Agreement:

  • xAI has been renting Nvidia’s AI chips from Oracle as part of its cloud services.

Reported by The Information:

  • The startup and Oracle were negotiating an expanded deal worth $10 billion to support xAI’s AI system development.
  • The negotiations included a multi-year agreement to rent Nvidia processors from Oracle for a planned supercomputer.

Breakdown of Talks:

  • Talks ended due to multiple issues:
    • Musk’s Demands: Musk wanted to build a supercomputer faster than Oracle deemed feasible.
    • Location Concerns: Oracle raised concerns about the inadequate power supply at xAI’s preferred location.
    • Capacity Commitment: The specific server capacity Oracle was discussing with xAI has since been contracted to another customer.

Current Status:

  • xAI’s Approach: Elon Musk stated that xAI would proceed independently to build their system for the fastest time to completion.
  • Oracle’s Engagement: Oracle remains open to discussions with xAI about its infrastructure needs.

Future Prospects:

  • While the immediate deal has fallen through, Oracle and xAI continue to maintain a relationship, with xAI already having a contract to train AI models in Oracle’s Gen2 Cloud.


  • The breakdown in talks reflects the complexities and high stakes involved in building and managing advanced AI infrastructure.
  • The incident highlights the challenges of aligning ambitious technological goals with practical constraints such as power supply and achievable timelines.

This development underscores the dynamic and sometimes volatile nature of high-tech partnerships, especially in the rapidly evolving field of artificial intelligence.