Why Nvidia’s Stock Continues To Rise—What You Need To Know About Elon Musk’s xAI

Nvidia (NVDA) shares reached a record high during intraday trading Tuesday after reports that Elon Musk told xAI investors that the artificial intelligence (AI) company would build a supercomputer.

The chipmaker’s shares were up 7.5% at $1,144.35 as of 1:49 p.m. ET Tuesday after trading as high as $1,149.39 during the session. The stock has more than doubled year-to-date.

Musk reportedly said that xAI would need 100,000 semiconductors to train and run the supercomputer, which he said will be running by the fall of 2025, according to The Information.

The article said xAI may partner with Oracle (ORCL) to develop the supercomputer. Oracle shares were up about 1% as of 1:50 p.m. ET Tuesday.

xAI recently announced its Series B funding round raised $6 billion, which the company said will “be used to take xAI’s first products to market, build advanced infrastructure, and accelerate the research and development of future technologies.”

The additional funding and the reported new supercomputer could help xAI compete with Microsoft-backed (MSFT) OpenAI. Musk was an early investor in the ChatGPT maker but has since sued OpenAI, alleging that the company’s close relationship with Microsoft had caused it to abandon its founding principles. Following the lawsuit’s filing, Musk announced that xAI’s chatbot, Grok, would be open-source.

Other companies within Nvidia’s AI ecosystem and other chipmakers also were trading higher Tuesday, including Advanced Micro Devices (AMD), ON Semiconductor (ON), and Micron Technology (MU).

The news comes shortly after Nvidia’s blockbuster earnings, which sent shares surging.