HPE beats Dell and Supermicro in $1B AI server deal with X

The financial scale of the deal underscores its significance. Analysts view HPE’s landmark $1 billion deal with X as a major endorsement of its AI capabilities, but competition in the fast-growing AI server market remains fierce.

“HPE’s $1 billion deal with X not only adds credibility to the company, but also underscores the recognition of its high-performance computing capabilities,” said Rachita Rao, senior analyst at Everest Group. “While HPE focuses on software-integrated AI infrastructure, Dell’s strong partnership with Nvidia and scalable AI solutions tailored for mid-market customers make it a major competitor. Supermicro, despite its robust AI server capabilities, is currently facing challenges related to accounting irregularities that could worsen its market position.”

Musk’s Expanding Artificial Intelligence Ambitions

Elon Musk’s well-documented commitment to artificial intelligence adds context to the scope of this agreement.

Musk’s businesses, including Tesla and xAI, have been among the most prominent adopters of artificial intelligence infrastructure. It is noteworthy that xAI Colossal supercomputerbuilt by Dell and powered by 100,000 Nvidia H100 GPUs, it’s already a game-changer for artificial intelligence.

This new partnership between X and HPE could potentially further Musk’s vision of integrating advanced artificial intelligence capabilities into his company. For example, Musk recently announced plans implement xAI’s Grok chatbot in Tesla carsallowing users to interact with their cars using conversational artificial intelligence.

The deal also highlights growing technology needs. “Nvidia Blackwell technology is likely to drive increased demand for liquid cooling solutions to manage heat-intensive AI workloads. While scalable infrastructure and computing power are critical now, future growth will depend on custom AI models requiring specialized chips such as ASICs and FPGAs to optimize performance,” Rao noted.