Musk’s xAI Nears $10 Billion Deal to Rent Oracle’s AI Servers

Elon Musk’s 1-year-old artificial intelligence startup, xAI, has been talking to Oracle executives about spending $10 billion to rent cloud servers from the company over a period of years, according to a person who has been involved in the talks.

The deal would make xAI one of Oracle’s largest customers as Musk tries to catch up quickly to rivals that have already spent billions of dollars on specialized servers needed to train and run conversational AI. The proposed $10 billion deal would be similar in size to the deals OpenAI and Anthropic, two of the leading AI developers, struck with Oracle’s bigger cloud competitors. It comes as xAI is finalizing a $6 billion equity funding round to help pay for cloud costs. The proposed cloud deal implies xAI would need to raise considerably more capital down the line.