Supermicro CEO Charles Liang announced on X (formerly Twitter) that he will set up shop near xAI’s Colossus AI supercomputer to help Musk achieve his dream of one million GPUs. Liang said that he plans to establish “local operations/production, validation, service and support.” Although it has been previously reported that Elon Musk shifted $6 billion worth of AI server orders from Supermicro to its competitors because of its financial problems, it seems xAI still plans to order from the beleaguered server supplier.
While Nvidia is likely the biggest winner behind Musk’s planned one million GPUs, which will most probably be powered by a mix of Hopper and Blackwell GPUs, it will also require all the accouterments needed to run a complete supercomputer. This includes servers and liquid-cooling solutions, which Supermicro is known for building. And with such a massive order, it does make sense for Liang and his company to put up local operations to support Musk’s ‘Gigafactory of Compute’.
Supermicro is here to support xAI's massive 10-fold expansion of the Colossus supercomputer in Memphis with over 1 million GPUs by establishing local operations/production, validation, service and support. With our optimized datacenter building blocks (DCBBS) and ambient…December 5, 2024
This move will benefit xAI’s operations, as Supermicro would be able to deliver its products and services to such a massive AI server with much greater efficiency. But aside from that, it would also mean that the company would invest millions, if not billions, of dollars in Memphis and the surrounding area to get its operations up and running in support of the Colossus AI supercomputer.
An investment of this scale would greatly benefit the city and the state of Tennessee, bringing in a lot of money in investments and likely creating several thousand new jobs, both directly and indirectly. However, some of the surrounding communities are also concerned about the negative impact of having such a power-hungry industry setting up shop in their area.
Some experts estimate that the 100,000 H100 GPUs Musk currently has in his Memphis facility need 155MW to run. While it already has approval from the Tennessee Valley Authority (TVA) to receive 150MW, some community members are concerned that this huge demand will cause energy prices to spike for residential consumers and that the quick solution to this problem would be to build a new gas plant.
After all, if Musk brings an additional 900,000 GPUs online in the coming years, then his AI facility would likely require over 1.5GW of power. And if other corporations, like Supermicro, set up shop locally, they would need power, too, thus putting a lot of strain on the local electricity supply grid.
The massive power requirements of AI training have pushed several tech companies to invest in nuclear power. Amazon, Google, Microsoft, and Oracle have already signed contracts to develop small modular reactors or restart old large nuclear plants. Even Meta is getting in on the action, having recently released a request for proposals. However, it seems that Elon hasn’t made any plans to invest in nuclear power just yet.
This development is good news for the labor force in Memphis and the state of Tennessee, especially as it has the potential to bring in new jobs and investments in the state and city. However, it must also consider the impact of such a power-hungry industry entering the area.
