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Nvidia Shares Climb 3.48% Amid $10.8 Billion AI Chip Deal with Elon Musk's xAI

Mover TrackerWednesday, Dec 4, 2024 5:31 pm ET

1min read

On December 4, Nvidia's shares rose by 3.48%, marking a four-day surge with a total increase of 7.24%. This comes amid new developments involving Nvidia and its significant involvement in advancing AI technology.

Reports on December 2 revealed that Elon Musk's AI startup, xAI, has placed a substantial order for Nvidia’s latest GB200 AI chips. Musk personally discussed the deal with Nvidia CEO Jensen Huang, finalizing a transaction worth $10.8 billion for priority delivery rights. Scheduled for January 2025, these chips aim to bolster xAI's supercomputing cluster, Colossus, designed to enhance AI capabilities substantially.

Industry insiders anticipate that Nvidia will officially unveil the Blackwell GB200 at its GTC conference on March 19, 2024. This new model is said to represent an AI acceleration platform comprising Blackwell B200 GPUs and a Grace CPU, offering significantly improved performance for large language models—purportedly 30 times that of the previous H100 at a fraction of the cost and energy consumption.

Furthermore, Nvidia is reportedly accelerating the development of its next-generation Rubin platform, aiming for an earlier release than the previously scheduled 2026. This strategic move is in collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) and other partners to meet the burgeoning demand anticipated from the AI sector. TSMC plans to ramp up its CoWoS advanced packaging capabilities to support this increased production, targeting a monthly capacity of 80,000 units by late 2025.

These advancements underline Nvidia's pivotal role in the AI industry, as it navigates the expanding landscape of technology that promises to reshape numerous sectors with next-generation processing power and efficiency. The company's strategic collaborations and technological innovations indicate a robust trajectory towards sustained leadership in AI hardware development.

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