Elon Musk announced that his AI startup, xAI, will deploy Nvidia H100 systems on its own rather than continuing to use Oracle.

Musk’s xAI originally tapped Oracle to help it deploy 24,000 H100s that were used to train its Grok 2 model. According to Musk, however, the company plans to go its own way, building out its own cluster containing some 100,000 H100s. Musk framed the decision in the context of needing to leapfrog its AI rivals, with controlling its own cluster being the key to doing so.

xAI contracted for 24k H100s from Oracle and Grok 2 trained on those. Grok 2 is going through finetuning and bug fixes. Probably ready to release next month.

xAI is building the 100k H100 system itself for fastest time to completion. Aiming to begin training later this month. It will be the most powerful training cluster in the world by a large margin.

The reason we decided to do the 100k H100 and next major system internally was that our fundamental competitiveness depends on being faster than any other AI company. This is the only way to catch up.

Oracle is a great company and there is another company that shows promise also involved in that OpenAI GB200 cluster, but, when our fate depends on being the fastest by far, we must have our own hands on the steering wheel, rather than be a backseat driver.

Elon Musk (@elonmusk) | July 9, 2024

The move is a blow to Oracle. As Investors.com points out, Oracle founder Larry Ellison touted its relationship with xAI in a recent quarterly earnings call, saying his company was working to secure more H100s for the startup.

“We gave them quite a few,” Ellison said at the time. “But they wanted more, and we are in the process of getting them more.”