2024-07-10 23:50:10
Setback for Elon Musk: An agreement between him and the company “Oracle” has fallen through. His expectations were unrealistic.
A planned billion-dollar deal between Oracle and Elon Musk’s AI startup xAI has fallen through. The xAI and Tesla boss Musk announced on Tuesday on his short message service X that they would now build a data center themselves with 100,000 Nvidia H100 processors. The media outlet “The Information” had previously reported that talks on the deal with a potential value of ten billion dollars had ended. Among other things, Oracle considered the construction time demanded by Musk to be unrealistic, it said, citing several people involved in the negotiations. The SAP competitor also expressed concerns about the power supply.
The deal was intended to expand an existing agreement in which xAI leases Nvidia chips for artificial intelligence (AI) from the cloud provider. However, Musk wrote on X that xAI must be faster than any other AI company to be able to compete. “If our fate depends on being by far the fastest, we must take the wheel ourselves instead of sitting in the back seat.” An Oracle statement was not immediately available.
Currently, xAI offers the chatbot Grok, a generative AI that basically uses the same technology as ChatGPT from Microsoft partner OpenAI. Musk has now explained that the successor Grok 2 was trained with 24,000 H100 chips rented from Oracle and is likely to be released next month. The new system with 100,000 H100s will be “by far the most powerful training cluster in the world,” Musk continued. The chip is Nvidia’s flagship and dates from 2022. With it in particular, the US company achieved a market share of 80 percent last year.