Talks on a possible $10 billion server agreement, in which the creator of Grok would have rented Nvidia’s AI chips from the cloud provider to train the AI chatbot, have apparently come to an end between Elon Musk’s artificial intelligence venture xAI and IT behemoth Oracle. The business hired GPUs to train the AI chatbot Grok 2.
Musk claims that xAI trained Grok 2 on 24,000 Nvidia H100s GPUs that it purchased from Oracle. The company now sells Grok 1.5, however as of late, Musk announced that Grok 2 will launch in August of this year.
“Bug fixes and tweaks are being made to Grok 2. Ready for release maybe next month,” Musk continued.
Musk’s xAI is constructing a data center of its own.
The Information reported, citing multiple persons with knowledge of the discussions, that xAI is purchasing chips to construct a data center on its own. Musk subsequently verified this information in a post on X, his other business.
According to him, his AI business is developing a system that utilizes Nvidia’s H100 graphics processing units exclusively.
“xAI is building the 100k (100,000) H100 system itself for [the] fastest time to completion. Aiming to begin training later this month. It will be the most powerful training cluster in the world by a large margin,” he added.
“The reason we decided to do the 100k H100 and next major system internally was that our fundamental competitiveness depends on being faster than any other AI company. This is the only way to catch up,” Musk highlighted. Notably, Grok 3 is tipped to launch by the end of this year.
Why xAI terminated its Oracle contract
According to the article, negotiations were stalled by Musk’s insistence on building a supercomputer faster than Oracle thought feasible, despite an ongoing multi-year arrangement to rent Nvidia processors from Oracle for a projected supercomputer.
“Oracle is a fantastic company, and there is another that has potential involved in that OpenAI GB200 cluster, but we need to take control of the situation rather than sit back and wait for things to happen to us,” Musk wrote in his essay.
News agency Reuters stated that the particular capacity that Oracle discussed with xAI has been contracted to another customer, citing a source familiar with the subject.
The insider stated, “The company continues to engage with xAI on its infrastructure needs and is always in discussion with customers about upcoming capacity.” Oracle has expressed concern about the insufficient power supply at the preferred location of xAI.
