Ah, you know how it is. Once you go on a GPU buying spree, it’s difficult to stop yourself from adding a few thousand more to the pile. I’d imagine, anyway. The Wall Street Journal reports that xAI is working with private equity firms to secure up to $12 billion in order to lease a massive supply of Nvidia chips for its AI-dominating aims, mere weeks after raising an estimated $10 billion through the sales of stock and debt.
The WSJ says that Valor Equity Partners, an investment firm believed to have close ties to Musk, is currently in talks with lenders to raise the required capital.
Musk might be the world’s richest man, but unlike OpenAI and Anthropic, his AI-based startup has decided not to partner with an existing cloud-computing provider to train and power its efforts, instead choosing to to build and run its own infrastructure.
And for that, it needs money. Which might go some way to explaining why Musk’s rocketship venture, SpaceX, was recently said to be investing $2 billion into xAI’s future ventures. It’s a bit like when I move my funds from my main account into another for holiday spending, except rather than buying tsatsiki and flip flops, xAI’s goals appear to be hoovering up a huge amount of high-end AI hardware.
Those new chips will look grand alongside its current Nvidia GPU loadout, which seems, quite frankly, immense. Its Colussus supercomputer alone, for example, is estimated to run on around 200,000 Nvidia H100 GPUs, drawing anywhere between 50 and 150 MW of power from a system supplemented with methane-burning gas turbines.
Originally, Colussus was comprised of 100,000 of the high-powered chips and constructed in 122 days, before being expanded to house a total of 200,000 of the beasties over the next 92. At the time, Nvidia CEO Jensen Huang said of the feat:
“I mean that is, like, superhuman. And, as far as I know, there’s only one person in the world who could do that. You know, I mean, Elon is singular in this understanding of engineering and construction and large systems, and marshalling resources. It’s unbelievable.”
Just wait until he gets xAI’s next GPU order in, I guess. It appears we’re in the middle of a gigantic AI hardware arms race, and Musk looks to be making sure he’s not missing out. Whether they’ll arrive quick enough to need housing in tents, however, remains to be seen. I’ve got an old marquee sitting in a storage facility, if he’s interested. One not-so-careful owner, I promise.