Dell Technologies and Super Micro Computer experienced a surge in stock prices on Thursday morning following their announcement of a partnership with Elon Musk's artificial intelligence startup, xAI. According to reports, Dell stock initially rose by around 7% before decreasing to below 1%, but still maintained a year-to-date increase of 101%. Super Micro Computer's stock saw a rise of approximately 5. 5%, marking a year-to-date increase of about 239%. Dell CEO, Michael Dell, revealed on X that the tech giant will be constructing a Dell AI factory in collaboration with AI chipmaker Nvidia to support xAI's Grok chatbot. In response, Musk confirmed that Super Micro Computer would be responsible for building half of the servers required for xAI's supercomputer. Recent developments include Super Micro's plans to establish three new manufacturing facilities in Silicon Valley to facilitate the growth of AI.

Additionally, Dell surpassed earnings expectations in its fourth-quarter results, driven by the demand for AI optimization in its server business. Memphis, Tennessee was selected by Musk as the location for xAI's "gigafactory. " Ted Townsend, president of the Greater Memphis Chamber, stated that this decision may potentially be the largest multi-billion dollar investment in the history of the city. In May, Musk presented xAI's proposal to investors to construct a supercomputer for its AI chatbot, Grok. Musk aimed for the supercomputer to be operational by next fall and was reportedly considering a partnership with Oracle for its development. xAI secured $6 billion in funding during a Series B funding round in May, with notable investors including Andreessen Horowitz, Sequoia Capital, and Saudi Arabia's Public Investment Fund. The company also made its ChatGPT rival, Grok, open-source in March.