Oracle ends discussions with Musk about $10 billion server sale

The billionaire Elon Musk’s artificial intelligence business, xAI, and computing giant Oracle have halted talks on a potential $10 billion server deal.

Talks on a possible $10 billion server agreement between computer giant Oracle (ORCL.N) and billionaire Elon Musk’s artificial intelligence startup xAI have come to a halt, according to a report on Tuesday. Talks to extend the current agreement under which xAI has been renting Nvidia’s (NVDA.O.) new tab AI processors from the cloud provider have been terminated between the startup and Oracle, the article said, citing multiple people engaged in the talks.

Musk stated in a post on his social media platform X that his xAI is developing a system “for the fastest time to completion” using Nvidia’s H100 graphics processing units on its own. According to sources, another customer has a contract for the precise capacity that Oracle was discussing with xAI. “The company is always in discussion with customers about upcoming capacity and continues to engage with xAI on its infrastructure needs,” according to a source.

Talks on renting Nvidia processors from Oracle for a multi-year supercomputer were in progress, but obstacles, including Musk’s insistence on building a supercomputer faster than Oracle thought feasible, were impeding the negotiations, according to the information. The article also stated that Oracle expressed reservations about the insufficient power supply at xAI’s planned location. To train AI models in Oracle’s Gen2 Cloud, xAI already has a contract in place.

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