Leader in high-performance AI servers.$Dell Technologies (DELL.US)$with$Super Micro Computer (SMCI.US)$In the early trading of the US stock market, the stock price rose sharply together. Prior to this, there was news that xAI, a new force in the generative AI field founded and led by Tesla CEO Musk, will build an "AI supercomputing system" with the joint efforts of Dell and Supermicro. As of the press release, Supermicro rose more than 9% and Dell rose nearly 8%.

Michael Dell, CEO of Dell Technologies, commented on the news, saying that the company will work with Dell to establish a "Dell Artificial Intelligence Computing Factory" for xAI. Dell Technologies' stock price subsequently rose in pre-market trading. "We are working with AI chip leader NVIDIA to build the Dell AI factory together to provide power for xAI's Grok model," Michael Dell replied in an X post on Wednesday.$NVIDIA (NVDA.US)$Trade.

Musk, who is known for being good at attacking people on social media platform X (formerly known as Twitter) and is also a private owner of X, immediately responded to the post and emphasized that Super Micro Computer will also provide AI servers. Super Micro Computer's official X account then quickly replied to Musk with a celebratory emoji and a website link.

Official spokespeople for Dell and Super Micro Computer did not immediately respond to requests for comment or more details on the collaboration.

In July 2023, Musk founded xAI, an AI startup that aims to launch an AI chatbot ChatGPT that can rival the popular OpenAI. The core researchers of xAI come from top AI companies such as Google and OpenAI.

Musk is one of the earliest supporters of AI technology. Before OpenAI launched ChatGPT at the end of 2022, he had supported OpenAI. Musk was one of the earliest initiators and investors of OpenAI, but chose to leave the OpenAI board in 2018 due to a disagreement with OpenAI management.

Last November, startup xAI founded by Musk launched Grok, one of the most powerful competitors to ChatGPT, and received up to $6 billion in venture capital in May of this year, making this AI startup, founded just a year ago, valued at $24 billion.

Dell's stock rose more than 3% in pre-market trading on Thursday. The stock closed at $149.15 on Tuesday, up 5% and hitting new highs since the start of the year, with an annual increase of 96%. Super Micro Computer closed at $920.01 on Tuesday and rose more than 5% in pre-market trading. It was included in the S&P 500 index this year and its year-to-date rise has reached a staggering 220%, far exceeding Nvidia's 170% rise.

The AI boom is sweeping the world, and Dell and Super Micro Computer, deeply tied to Nvidia, are big winners.

Dell and Super Micro Computer are both increasing capacity to manufacture AI servers featuring Nvidia H100 and updated versions of H200/GB200 to win larger-scale business from companies building and using AI applications. Numerous generative AI applications like ChatGPT and Sora video models require immensely large data processing capabilities and increasingly expanding computing resources.

Dell and Super Micro Computer's major customers are concentrated in ChatGPT and Sora developers like OpenAI and many AI startups, including xAI founded by Musk, as well as cloud service giants like Oracle and Amazon AWS. Due to their close relationship with Nvidia, Dell and Super Micro Computer, deeply tied to Nvidia, can often obtain larger-scale Nvidia AI GPU shipments through their strong supply chains and long-term partnerships with Nvidia.

Through years of close cooperation with Nvidia, Dell and Super Micro Computer use the latest Nvidia GPUs and integrate a complete CUDA acceleration toolkit to provide powerful GPU acceleration capabilities for the indispensable technical link of AI training/inference workloads for global enterprises, ensuring the best integration and performance optimization of hardware and software. Their deep partnership with Nvidia ensures the highest priority of hardware and software integration and performance optimization.

Earlier this week, Super Micro Computer announced plans to add three new server production facilities in Silicon Valley to support the development of the artificial intelligence field and provide strong computing power support for building and iterating AI models. Dell announced last month that its revenue for servers used to process AI training/inference tasks in the previous quarter had more than doubled from the previous quarter, and its backlog of orders had also increased significantly.

Dell is committed to providing servers optimized for AI workloads. These servers not only have Dell's leading high-performance computing capabilities and efficient resource integration system in the industry, but also use Nvidia's latest AI GPU to accelerate AI training and inference processes. Super Micro Computer is known for its customization of server solutions in the industry and can optimize hardware configurations according to specific customer needs. This customization capability is particularly important for startups such as xAI.

According to a research report by well-known research institution IDC, the total investment in software, hardware, and other related services for artificial intelligence (AI) IT systems centered on AI globally in 2022 is only about US $132.49 billion. However, the institution expects it to increase to US $512.42 billion in 2027, with a compound annual growth rate (CAGR) of 31.1%, and will fully focus on the generative AI field similar to ChatGPT.

The latest IDC survey shows that by 2027, 45% of companies are expected to master and use generative AI tools to jointly develop digital products and services, striving to double their revenue growth compared to their competitors. IDC also predicts that the global generative AI market will grow at a compound annual growth rate of 85.7%, and the size of the global generative AI market will approach US $150 billion by 2027. This means that Dell and Super Micro Computer, who are leaders in the AI server field, one of the core AI infrastructure, are expected to continue to benefit from this unprecedented AI boom in the coming years.

Edited by Jeffrey