NVIDIA Corporation (NASDAQ: NVDA) stock soared during intraday trading Tuesday following reports that Elon Musk had announced his artificial intelligence venture, xAI, would build a supercomputer.
According to sources cited by The Information, Musk revealed plans for xAI to develop a supercomputer requiring 100,000 semiconductors for training and operations. The proposed timeline suggests that the supercomputer could be operational by the fall of 2025.
The report also indicated that xAI might collaborate with Oracle (ORCL) to develop this supercomputer. Notably, Oracle shares closed up 1.29% at $124.49 on Tuesday, potentially reflecting market optimism surrounding this partnership prospect.
xAI recently announced that it raised $6 billion in its Series B funding round. The company plans to utilize these funds to launch its first products, build advanced infrastructure, and accelerate the research and development of future technologies.
This substantial funding and development of a new supercomputer could position xAI to better compete with Microsoft-backed OpenAI. Musk, an early investor in OpenAI, has since sued the company, alleging that its close relationship with Microsoft led to a deviation from its founding principles. Following the lawsuit, Musk declared that xAI’s chatbot, Grok, would be open-source.
The ripple effects of Musk’s announcement were felt across NVIDIA’s AI ecosystem and the broader semiconductor industry. Advanced Micro Devices (NASDAQ: AMD), ON Semiconductor (NASDAQ: ON), Arm (NASDAQ: ARM), and Micron Technology (NASDAQ: MU) all experienced upticks in their stock prices on Tuesday.
NVIDIA (NASDAQ: NVDA) Stock Price Action
On Tuesday, NVDA stock surged 6.98%, closing at $1139, marking a 20.17% increase for the week. The trading volume was 65,272,788 shares, significantly higher than the average daily volume of 49.55 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
