Musk Just Spilled Extra Details About the xAI Supercomputer. Super Micro, These Stocks Are Jumping.

A hallmark of the race to master artificial intelligence technology has been corporate secrecy as AI companies seek to surprise rivals and the market with new developments.

Ever the outlier, Elon Musk has taken a different tack by keeping everyone updated on the latest developments at his xAI start-up. It was giving some stocks a bump early Thursday.

Dell Technologies and Super Micro Computer, who Musk called out as the providers of server infrastructure to power xAI’s ambitions, were rising.

Super Micro shares were up 4.7% at $962.77 in premarket trading, having more than tripled in value so far this year. Dell was up 3.2% at $153.92.

Dell is building an “AI factory” with xAI, said CEO Michael Dell in a post on X, formerly Twitter, on Wednesday.

“To be precise, Dell is assembling half of the racks that are going into the supercomputer that xAI is building,” Musk wrote in his own post. Musk added that “SMC”—meaning Super Micro Computer—would be the second partner.

The Tesla chief executive is taking an unusually transparent approach when it comes to giving details of xAI’s plans, after criticizing rivals such as OpenAI for their relationship with corporate backers. He is also likely hoping to keep investors enthusiastic after recently saying he had raised $6 billion in xAI’s latest funding round to take its first products to market.

Earlier this month, Musk confirmed plans for xAI to build computing infrastructure to train AI using 100,000 of Nvidia’s H100 chips, which he said would be online “in a few months.” He said the next stage of AI computing could require as many as 300,000 of Nvidia’s next-generation Blackwell chips.

The news of Dell and Super Micro’s involvement shouldn’t come as a particular surprise, as they are two of the biggest players in the AI server market. However, a notable absentee from the companies working with xAI was Hewlett Packard Enterprise, which is competing with Dell and Super Micro in AI servers.

Dell shares have risen 95% so far this year but have fallen back from their late-May high of around $179 after its most recent earnings report disappointed the market and analysts questioned the profitability of its AI server business. That has created a buying opportunity, according to Morgan Stanley analyst Erik Woodring.

“Take advantage of recent post-earnings underperformance and well-telegraphed selling pressure from a large shareholder…to ‘buy the dip’ on a leading AI Infrastructure player trading at a relative discount to peers,” Woodring wrote in a research note this week.

Woodring kept a $155 target price and Overweight rating on Dell.

Write to Adam Clark at [email protected]