Hewlett Packard Enterprise (HPE) has reportedly won a $1 billion contract to supply artificial intelligence (AI) servers to Elon Musk’s X platform, formerly known as Twitter. The deal, which was finalized in late 2024, marks a significant victory for HPE in the competitive AI server market, edging out prominent rivals Dell and Supermicro, according to a Bloomberg report. HPE has not officially commented on the agreement due to its confidential nature.
A Landmark Win for HPE
The contract is seen as a significant boost for HPE’s AI business. Traditionally behind competitors like Dell and Supermicro in AI server sales, this deal underscores confidence in HPE’s technology. In the last quarter, HPE’s AI server business grew by 16%, generating $1.5 billion in revenue, showing strong market momentum.
The servers are likely GPU-powered, potentially using Nvidia’s advanced AI GPUs. These GPUs represent a significant share of the cost in high-performance systems.
If the deal involves Nvidia’s Blackwell GPUs, X may acquire servers with up to 10,000 GPUs, providing formidable computational power. However, specific details about the server configurations remain speculative.
Strategic Shift in AI Investments
This deal reflects a broader trend of increased investment in AI and cloud technologies by major tech companies. Elon Musk’s X platform follows Musk’s AI venture, xAI, which contracted Dell to build its Colossus supercomputer with 100,000 Nvidia H100 GPUs.
Despite Musk’s previous reliance on server suppliers like Supermicro and MiTAC (Tyan), the shift to HPE underscores evolving priorities in Musk’s tech ventures. Industry experts suggest the move could signal a new focus on leveraging cutting-edge AI infrastructure to enhance X’s capabilities.
Growing Demand in AI Markets
HPE’s win aligns with projections of exponential growth in the AI sector. Industry experts estimate the total addressable market (TAM) for AI infrastructure to reach $1 trillion over the next three years. The collaboration between HPE and Nvidia has been pivotal in driving such growth, as seen in HPE’s prior deals, including a $40 million contract with Hut 8 for high-performance computing systems.
The Road Ahead
Companies like HPE are securing major AI contracts, signaling a shift toward larger, integrated partnerships. These deals now include not just hardware but also networking, software, and services, highlighting the evolving scope of AI solutions.
The HPE-X partnership could influence sectors like manufacturing and healthcare as AI technologies reshape industries. This contract positions HPE as a key player in AI infrastructure, marking a competitive new era in the market.
This development was first reported by Bloomberg.
