xAI, Elon Musk’s AI startup, has shifted all AI server orders from troubled Supermicro to Dell, reports UDN.com. Dell, already among the largest makers of servers, reportedly benefits from this decision, just like its suppliers, Inventec and Wistron. In contrast, losing a multi-billion business to rivals amid a potential NASDAQ delisting could be another devastating blow for Supermicro.
Dell and Supermicro used to supply Musk’s companies, including xAI and Tesla. Musk even appeared publicly with Supermicro’s CEO, Charles Liang, who revealed that xAI had made substantial purchases of Supermicro’s liquid-cooled AI servers. However, after the U.S. Department of Justice began to probe Supermicro for accounting manipulations and alleged export violations to China and Russia and its stock plummeted 35% in one day, UDN says Musk’s companies decided to shift orders away from the troubled company.
Among the largest AI server suppliers, Dell is well-positioned to absorb orders. If true, Wistron, which produces motherboards for Dell’s AI servers and does some assembly tasks, would be one of the biggest beneficiaries of this shift. In fact, Wistron is already expanding its production capacity to meet surging AI demand, particularly in its three Hsinchu facilities in Taiwan and its Mexican operations. Wistron is optimistic about the growing demand for AI servers and aims for triple-digit annual growth.
Inventec, another major supplier for Dell, would also reap the rewards from an order realignment. Inventec has long been involved in AI server production and is one of Dell’s top three global server assembly partners. This year, the company primarily supplied machines based on Nvidia’s Hopper processors. UDN claims the company will be ready to mass-produce Nvidia Blackwell-based machines (powered by B200 and B200A GPUs) in the first quarter of 2025. The company reportedly has spare manufacturing capacity in Mexico, so it will likely be able to produce more AI servers for companies formerly served by Supermicro.
Supermicro’s issues stem from delayed financial filings, putting the company at risk of being delisted from NASDAQ. To avoid delisting, Supermicro needed to submit a plan by November 16 explaining the delay and specifying when the required 10-K annual report would be filed. Since the 16th fell on a Saturday, the company’s final deadline is November 18.
If Supermicro is delisted, it could face serious financial repercussions, including a sharp decline in stock value and the immediate repayment of $1.725 billion in convertible notes, which could severely harm the company.
