The News
Nvidia and Elon Musk’s artificial intelligence startup are joining an effort led by BlackRock, Microsoft, and Abu Dhabi to invest billions into AI.
The fund aims to initially raise $30 billion to build the data centers and energy infrastructure needed to power advanced AI.
The addition of Musk’s xAI into the partnership means the tech billionaire will join forces with the main financial backer of one of his biggest rivals, OpenAI, which has a longstanding partnership with Microsoft. A BlackRock executive is also a member of the ChatGPT-maker’s board.
Tech firms are pouring capital into increasingly ambitious infrastructure to keep up with the technology’s own voracious computing needs: In January, SoftBank, Oracle, and OpenAI together announced they would spend up to $100 billion on AI infrastructure in the US.
Reed’s view
This new development is sure to sting OpenAI, once an inseparable partner to Microsoft. Musk is suing OpenAI, hoping to prevent it from becoming a fully formed company, and he’s been prodding it with hostile takeover offers.
This is all about chips. OpenAI was forced to go elsewhere when Microsoft was unable to procure enough Nvidia GPUs, while Microsoft has been irked by OpenAI’s disloyalty.
But the bigger takeaway is that some of the most serious players in AI are behind the infrastructure partnership. There is only one frontier foundation model company included, and it’s not Anthropic or OpenAI.
On stage Tuesday during his keynote address at the company’s annual conference, Nvidia CEO Jensen Huang bragged about the company’s role in building “Colossus,” the xAI data center in Memphis, the largest supercomputer built to date. Musk’s company is now hoping to grow that cluster ten-fold, to one million GPUs, likely supplied by Nvidia.
Colossus was built in 122 days. Nvidia is clearly on Musk’s side. If it doesn’t have the world’s best AI researchers today, it will surely have more success recruiting when AI researchers cannot resist greater compute power.
The biggest bottleneck to Musk’s supersonic speed is essentially energy, which the infrastructure partnership aims to rectify.