xAI’s New Data Center Initiative
Elon Musk’s AI startup, xAI, will build its own AI data center. This move ensures faster development and reduces reliance on Oracle. Consequently, Oracle’s stock dropped by 3%.
Transitioning from Oracle
xAI initially contracted 24,000 H100s from Oracle, using them to train Grok 2. Grok 2 is now undergoing fine-tuning and bug fixes, with an expected release next month.
Building the World’s Most Powerful Training Cluster
xAI is constructing a 100,000 H100 system to achieve the fastest time to completion. Training is set to begin later this month. This system will be the world’s most powerful training cluster by a large margin.
Strategic Shift for Competitiveness
xAI decided to develop the 100,000 H100 system and future major systems internally. Musk explained that their fundamental competitiveness depends on being faster than any other AI company. This internal control is crucial for xAI to catch up and stay ahead.
The Importance of Independence
Oracle is a great company, and another promising company is involved in the OpenAI GB200 cluster. However, xAI must have control to ensure it remains the fastest. Independence is essential for xAI to steer its own fate rather than being a backseat driver.