Musk’s xAI Eyes $10B Funding, Strikes AI Deal with Dell

Elon Musk’s xAI is making headlines again. The AI startup is in talks to raise $10 billion, pushing its valuation to $75 billion. This massive funding round could bring in major investors like Sequoia Capital, Andreessen Horowitz, and Valor Equity Partners. Earlier, xAI secured $6 billion at a $40 billion valuation. With this new push, the company is aiming to expand its data centers. More data centers mean more power to train advanced AI models.

xAI Partners with Dell for AI Servers

To scale its AI ambitions, xAI is reportedly striking a deal with Dell. The agreement, worth over $5 billion, will bring high-performance servers to xAI. These servers will include NVIDIA’s GB200 chips, designed for AI workloads. Dell has been aggressively expanding in the AI server market, competing with Super Micro and Hewlett Packard Enterprise. A previous xAI project in Memphis already used Dell and Super Micro servers. This new deal will further solidify Dell’s position in AI infrastructure.

Dell’s stock reacted quickly to the news, jumping as much as 6% to $116.88 on Friday before paring some gains. Despite the surge, the stock had slipped 4.3% earlier this year. Analysts expect Dell to have shipped over $10 billion worth of AI servers in the last fiscal year and predict this number will reach $14 billion by January 2026. Dell is set to report its fiscal fourth-quarter earnings on Feb. 27, with its AI server business being a key focus for investors. According to Bloomberg Intelligence analyst Woo Jin Ho, this deal could firmly establish Dell as a major AI-server provider and drive sales, though its impact on profitability remains uncertain.

NVIDIA Chips Power xAI Growth

xAI is heavily investing in NVIDIA technology. The GB200 chips included in the Dell deal will enhance its computing power. AI training requires immense processing capability, and NVIDIA dominates this space. Tesla, another Musk-led company, also relies on NVIDIA chips for its AI-driven vehicles. By securing these AI processors, the company is positioning itself to compete with industry giants like OpenAI. Musk wants it to lead in AI development, and access to NVIDIA’s latest hardware is key to that mission.

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xAI Future Looks Bright

With billions in new funding, a major deal with Dell, and cutting-edge NVIDIA chips, xAI is set to grow fast. The company is building a strong AI ecosystem, from data centers to AI models like Grok. Musk’s legal battle with OpenAI adds another layer to the AI industry rivalry. As xAI expands, its impact on AI development will only increase. The next few months will be crucial as the company rolls out new technology and partnerships.