Musk’s xAI, Oracle end talks on $10 billion server deal, The Information reports

(Reuters) -Billionaire Elon Musk’s artificial intelligence startup xAI and tech giant Oracle have ended talks on a potential $10 billion server deal, The Information reported on Tuesday.

The startup and Oracle have ended talks to expand an existing arrangement under which xAI has been renting Nvidia’s AI chips from the cloud provider, the report said, citing several people involved in the talks.

The AI startup is building a system using Nvidia’s H100 graphics processing units by itself, Musk said in a post on his social media platform X.

A multi-year agreement to rent Nvidia processors from Oracle for a planned supercomputer was underway, but talks were held back by issues such as Musk’s demands to build a supercomputer faster than Oracle deemed possible, The Information said.

Oracle also raised concerns that xAI’s preferred location had inadequate power supply, the report added.

Oracle and representatives for Elon Musk did not immediately respond to Reuters’ requests for comment.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D’Silva)