HPE Stock Rises After Bloomberg Report on $1 Billion AI Server Deal With Musk’s X By Investing.com

The shares of Hewlett Packard Enterprise Co . (NYSE:) climbed over 3% on Friday afternoon after Bloomberg reported the company’s lucrative deal with Elon Musk’s social media platform X. The deal, which closed late last year, is valued at over $1 billion and will see HPE deliver AI-optimized servers. This represents a significant victory over competitors such as Dell Technologies Inc. and Super Micro Computer Inc.

According to anonymous sources, the agreement highlights the growing demand for high-performance servers for AI workloads. Musk’s companies, including Tesla Inc. and xAI, have become major customers in the hardware space. Interestingly, xAI’s supercomputer project in Memphis already uses hardware from Dell and Super Micro.

The deal is a notable endorsement of HPE’s AI server capabilities, which were previously considered somewhat less advanced than the competition. The AI ​​servers are equipped with state-of-the-art chips from companies like Nvidia Corp. whose explosive growth also boosts the sales of its server and system provider customers.

This deal could mark a turning point for HPE’s AI server business. Chief Financial Officer Marie Myers expressed expectations in a conference call in December that companies and governments will increasingly deploy AI systems. However, she noted that the order situation is expected to remain competitive and irregular.

The overall market for data center infrastructure is on an upward trend. Spending is estimated to have increased 34% to $282 billion in 2024, according to Synergy Research Group. The research group highlighted Nvidia’s significant growth as a driving force in the industry, from which its server and system provider customers also benefit through higher sales.

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