Dell Technologies Inc shares rose in premarket trading after chief executive officer Michael Dell said the company is building a “Dell AI factory” for Elon Musk’s startup xAI alongside Nvidia Corp.

“We’re building a Dell AI factory with Nvidia to power Grok for xAI,” Michael Dell wrote in an X post on Wednesday.

Musk responded to comments about the post, saying that Super Micro Computer Inc would also be providing servers. Super Micro’s X account replied to Musk with a celebration emoji and a link to its website.

Representatives for Dell and Super Micro didn’t immediately respond to requests for comment and additional details.

Both Dell and Super Micro are increasing their server capacity to win more business from companies building and working with artificial intelligence (AI) programmes, which require more data processing power. Super Micro announced earlier this week that it plans to add three new facilities in Silicon Valley to support AI growth. Dell said last month that revenue from its servers equipped to handle AI tasks more than doubled last quarter from the period before and its backlog jumped.  

Musk launched xAI, an AI startup, in July 2023 as an answer to OpenAI and its wildly popular chatbot, ChatGPT. Musk was instrumental to OpenAI’s founding, but withdrew his support and warned of the dangers of AI to humanity. The startup launched its ChatGPT competitor Grok last November and raised US$6 billion in venture capital funding in May at a pre-money valuation of US$18 billion.

Dell shares rose about 3% in premarket trading on Thursday before exchanges in New York reopened after Wednesday’s holiday. They had closed 5% higher at US$149.15 on Tuesday. Super Micro also rose about 3% after closing at US$920.01 on Tuesday.

  - Bloomberg