Dell Technologies is reportedly on the verge of scoring a major deal with Elon Musk’s xAI for Nvidia-powered a servers, a deal worth $5 billion.

xAI announced in December 2024 that it planned to expand its Memphis supercomputer, with the goal of incorporating at least one million GPUs. The company subsequently raised $6 billion in funding to spur future growth and development.

“In Memphis, we’re pioneering development in the heartland of America,” xAI’s Brent Mayo declared when the expansion was announced. “We’re not just leading from the front; we’re accelerating progress at an unprecedented pace while ensuring the stability of the grid utilizing megapack technology.”

According to Bloomberg, as part of that expansion, xAI is nearing a deal with Dell that would be worth $5 billion. The deal will see Dell supply xAI with servers containing Nvidia BG200 chips.

Neither company responded to Bloomberg’s request for comment, and the outlet’s sources said some details were still being worked out.

If the deal goes through, however, it ““would firmly establish the company as a leading AI-server provider and boost sales, though the impact on profitability is less clear,” wrote Woo Jin Ho, a Bloomberg Intelligence analyst.