Dell Shares Jump on 'AI Factory' for Musk's xAI

Dell and super micro also rallying after Michael Dell said the company is building a Dell AI factory for Elon Musk startup X AI. Bloomberg Technology Co host Ed Ludlow joins us now for more. Ed, give us the details. Well, it directly relates to what Abby was just talking about in NVIDIA, because an AI factory is just a new term that Dell's come up with for server racks, rows and rows of server racks in a server farm. And this is all played out over social media in the last 24 hours. As you said, Michael, Dell posted on X that they're making AI factories for X AI to develop. Grok Supermicro was then thrown into the mix by Elon Musk himself, saying that they will also have a part of it. What I find so interesting about this is you can kind of do the math. We talked a lot, you and I, Kate, about how in the context of AI chips, it's not just something you can hold in your hand. It's not just a chip. It goes into a server rack that includes networking gear storage, high bandwidth memory chips. But our colleagues at Bloomberg Intelligence have basically said if Dell get just 50% of the XAI ideal and it's to develop Grok 3, the latest generation large language model from them and you price each server rack at $1 million, it could be a deal. That value is valued up to $3 billion for Dell and therefore justify the consensus that the part of Dell's business where they make service specifically for compute, for AI has a 25% growth rate. And and it's a part of the business that people are excited about, but we were left a bit disappointed following earnings. So look at what's happening. It's not just Dell and Supermicro rising this morning. HPE is up by association. And I would probably argue that a lot of the gain in NVIDIA in this morning session is because of that Dell announcement, so to speak, because it is the NVIDIA GPU's that go into those server racks alongside all the other gizmos.