xAI's $1B Monthly Deficit, but Nvidia Deal & Colossus 2 Project Signal AI Ambition
xAI is facing significant financial losses, currently incurring a monthly deficit of $1 billion. Meanwhile, the company is expanding its AI capabilities through strategic partnerships and investments.
xAI has struck a major deal with Nvidia, leasing GPUs for five years. This comes as Nvidia recently agreed to a $100 billion deal with OpenAI for AI accelerators. In a separate move, AMD has secured a substantial deal with OpenAI to serve as the GPU supplier, potentially earning up to 10% of AMD's shares.
xAI's current AI data center, Colossus, boasts an impressive 200,000 GPUs and over an exabyte of mass storage. The company is now planning to raise $20 billion for its next project, Colossus 2, with $7.5 billion in equity and $12.5 billion in debt. Nvidia is set to contribute $2 billion of the equity portion and participate in the next funding round.
xAI's financial struggles continue, but the company is forging ahead with ambitious plans. Its strategic partnerships with Nvidia and AMD, along with the upcoming Colossus 2 project, signal a commitment to advancing AI capabilities despite the challenges.
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