The growing demand for computing power for AI workloads is fueling rapid growth in the high-powered server market. It’s a lucrative business, especially for firms such as Dell, Supermicro and Hewlett Packard Enterprise. They have all seen an increase in demand for their high performance server products over the past few years.
Report from Bloomberg reports that HPE has secured a deal worth over $1 billion to provide Elon Musk’s X network with servers optimized for AI work.
Although the report does not specify how the servers will use, it is likely that some of the capacity would be used for Grok, X’s AI chatbot. X announced at the end of 2024 that it would be rolling out Grok-2 for all users free. It’s safe to assume that additional capacity will require more infrastructure.
Bloomberg states that X’s contract with HPE was signed in late 2024. This is according to sources familiar with the situation.
Musk’s companies, such as xAI and Tesla are major buyers for AI hardware. Musk declared the Colossus, built by xAI Memphis, to be “most powerful AI training system in the world.” He claimed it was “from start to finish” built in just 122 day.
Colossus is powered by 100,000 Nvidia GPUs H100, but plans are in place to expand its operations. Supermicro has recently faced a number of challenges, including the resignation and other related issues. As a result, Supermicro has faced some challenges recently, including the resignation of its auditor and other related matters. MarketWatch reported that it remains a “major player in the AI revolution” despite having recently established operations in Memphis. This is to support xAI’s goal of building a facility with 1,000,000 GPUs.
Supermicro provided the servers originally for Colossus, andBloomberg ( reports that both firms bid to supply equipment for this new venture but were ultimately unsuccessful.
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According to a report by Bloomberg“HPE’s Liquid-Cooling Technology may have played a part in the win,” wrote Woo Ji Ho, an analyst with Bloomberg Intelligence. He added that while larger deals are good for sales they can also drag on margins.
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Wayne Williams writes news for TechRadar Pro as a freelancer. He has been writing for 30 years about computers, technology and the web. During that time, he wrote for many of the UK PC magazines and launched, edited, and published several of them.
