Dell shares rose about 4% on Friday following a report from Bloomberg that Elon Musk’s startup xAI was preparing an agreement to buy $5 billion in artificial intelligence servers from the hardware maker.
The equipment containing Nvidia‘s GB200 graphics processing units (GPUs) would be delivered this year, according to Bloomberg, which cited unnamed sources.
Many data center gear manufacturers have been seeing growth from selling boxes for training and running AI models. Dell said in November that it had $3.6 billion in quarterly AI server order demand. Dell’s total revenue for the latest quarter totaled $24.37 billion, up 10% year over year.
In December, xAI announced a $6 billion funding round. CNBC reported that the Musk startup, which competes with OpenAI, was raising the money to purchase GPUs. The Grok assistant from xAI is available for people to use on X, which is also owned by Musk.
Musk has been building out xAI’s facility in Memphis, Tennessee.
Dell declined to comment. xAI didn’t immediately respond to a request for comment.