Oracle Jumps on Report of $10 Billion Cloud Deal With Musk’s xAI

Brody Ford

Tue, May 14, 2024, 12:35 PM1 min read

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(Bloomberg) -- Oracle Corp. gained as much as 5.3% after the Information reported the company is close to a deal for a $10 billion cloud contract with Elon Musk’s artificial intelligence startup xAI.

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Oracle Chairman Larry Ellison said last September that the company had a deal to provide cloud infrastructure to xAI to train artificial intelligence models. Ellison didn’t release the value or the duration of the contract at that time.

“Boy, did they want a lot more” computing power, Ellison said of Oracle’s work with xAI during a December event. “They wanted more and we are in the process of getting them more.”

Musk’s xAI has been talking to Oracle about spending $10 billion to rent cloud servers for a period of years, the Information reported Tuesday, citing a person involved in the talks. The discussions are ongoing and there is no guarantee the companies would reach an agreement, the Information said.

The artificial intelligence startup was set to close a funding round of $6 billion, valuing the company at about $18 billion, Bloomberg reported last week. It wasn’t clear whether Oracle made an investment as part of that round, the Information reported.

Oracle didn’t immediately respond to a request for comment.

The shares gained 3.7% to $120.68 at 12:25 p.m. in New York after earlier hitting $122.55. The stock has increased 10% this year through Monday’s close.

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