Elon Musk's AI startup xAI and Oracle have ended discussions on a potential$10 billion server deal. The talks aimed to expand an existing agreement where xAI rents Nvidia AI chips from Oracle. Musk stated that xAI would build a system independently using Nvidia's H100 graphics processing units for quicker completion.

A source revealed that the specific capacity discussed had been allocated to another customer. Despite this, Oracle continues to engage with xAI regarding its infrastructure needs. Issues such as Musk's ambitious timeline for building a supercomputer and concerns about power supply at the preferred location contributed to the breakdown of talks.

xAI still contracts with Oracle to train AI models in Oracle's Gen2 Cloud.