Elon Musk awards billion-euro contract for AI server to HPE

Hewlett Packard Enterprise (HPE) is supplying AI servers worth around 1 billion US dollars to Elon Musk's company xAI. This was reported by the Bloomberg financial service. The agreement was reached at the end of 2024. HPE did not wish to comment on the deal as it is confidential.

The US company xAI operates the AI system Grok, which is linked to the social media platform X, as well as other AI models and applications.

At the end of September 2024, Elon Musk announced that xAI had built the huge "Colossus" AI system in record time in a former Electrolux plant in Memphis, Tennessee. It was also announced that this AI data center would continue to grow.

Servers from Dell and Supermicro were used for Colossus. Shortly afterwards, however, irregularities in Supermicro's financial reports came to light.

According to Bloomberg, HPE was able to outbid its competitors Dell and Supermicro, who would have bid again. According to analysts, HPE's AI server business lagged behind Dell and Supermicro for some time. Musk's company's confidence in HPE's offerings could therefore be interpreted as an accolade.

Grok-2 is free for all X users

The demand for computers to perform AI tasks has led to a boom among manufacturers of high-performance servers and special chips and processors .
and processors. Companies from Musk's empire such as Tesla and xAI are among the major buyers of such hardware and associated services.

The main xAI product, the Grok chatbot, was initially only available to paying users. In mid-December, the company announced that its new version based on the Grok-2, model, would gradually be made available to all users of the network free of charge. This included new functions such as web search, quotes and the Aurora image generator. Premium users will receive higher usage limits and will be the first to have access to additional features in future.

Shortly before Christmas, Musk was able to raise around six billion US dollars in venture capital for xAI in a further financing round. The investors include Sequoia Capital, Nvidia and AMD. The aim is for Grok to catch up with the AI models of OpenAI, Google, Meta & Co. At the time, it was said that Nvidia and AMD would help xAI to expand its own infrastructure.

Musk is suspected of having used Grok for his detailed AfD election recommendation. However, the chatbot particularly recommends the Greens when asked for a party to recommend for the Bundestag elections: "They are considered by some to be the only party with a well thought-out and sustainable concept without populism."

(nen)