It seems like we are entering into the next phase of the AI hype, and now, the industry is reporting "trillions of dollars" worth in computing demand, driven by the likes of Elon Musk.
Elon Musk's xAI Plans to Acquire Compute Power Equivalent to 50 Million H100 AI Chips, Worth Trillions of Dollars
The AI bandwagon has been running for several years now, and some of the people have started to price in a "fade away" sooner or later, however, recent announcements by some of the top AI firms out there indicate that the demand for AI chips is far from over, and future orders are expected to be much more massive compared to older ones. After OpenAI and Meta, Musk's xAI has plans to scale up its computing power to newer levels, as he has announced to acquire NVIDIA's high-end AI servers and accelerators, which based on rough estimates, could be worth trillions of dollars.
One of the more important announcements was that xAI's massive AI cluster, the Colossus 2, will come online in a few weeks. It will reportedly house NVIDIA's Blackwell-based GB200 and GB300 AI clusters, with a total count of a whopping 550,000 units. Now, just taking that into account, xAI has almost spent around $2 trillion putting the Colossus 2 online, and these aren't rookie numbers; this is unprecedented spending. We are making the estimates based on what Elon has disclosed, but its amazing to see such huge capital being poured into the AI sector.
According to Elon, the goal is to get up to 50 million units of H100 equivalent-AI compute power online in the next five years. Depending on the price NVIDIA provides to exclusive customers like xAI, this alone could be worth $1.5-$2 trillion. And, in terms of compute power, you are looking at around 200 exaFLOPS, which by the way, is 20 times higher than the world's fastest supercomputer, and this shows that Elon isn't backing down on the AI frenzy any time soon, and for Team Green, well, there are lot of AI chip orders to get to.
Interestingly, OpenAI's CEO, Sam Altman, announced his plans to get over 100 million AI chips online in the upcoming years. Along with that, Meta's CEO, Mark Zuckerberg, revealed that the company is building multiple GW-scale AI clusters, which shows that Big Tech's spending towards the AI hype isn't cooling down for now, And, when you factor in the demand NVIDIA currently sees with sovereign AI, Team Green does have a long way to go in the industry.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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