Founded by Elon Musk, startup xAI appears to have taken all the previous orders for AI servers from struggling Supermicro to give them to its competitors. According to UDN, the beneficiaries will be Dell, as well as its partners Inventec and Wistron. For Supermicro, which is already facing delisting from Nasdaq, this will be another blow.
Previously, Dell and Supermicro supplied equipment to Elon Musk’s companies, incl. xAI and Tesla. It was officially reported that xAI purchased liquid-cooled AI servers from Supermicro. But after the US Department of Justice began an investigation into the supplier’s activities in connection with possible accounting fraud and violation of the sanctions regime, the company’s shares collapsed. After this, according to UDN, Musk’s companies decided to transfer orders to other performers.
Among AI server vendors, Dell has good order winning capabilities. For example, Wistron makes motherboards for the company’s AI servers and handles some assembly tasks—partners that will be among the main beneficiaries of Supermicro’s collapse. In fact, Wistron is already expanding production capacity to meet demand, particularly at three factories in Taiwan as well as in Mexico. Wistron is very optimistic about the future and expects demand for AI servers to grow at triple-digit percentage rates.
Image source: Bermix Studio/unsplash.com
Inventec is also a major Dell supplier and will also get its share of the pie from Supermicro’s order. The company has long been involved in the production of AI systems and is one of Dell’s top three partners involved in server assembly. In 2024, the company supplied machines based on NVIDIA Hopper family chips, but in the first quarter of 2025 it will be able to supply options on the NVIDIA Blackwell platform – with B200 and B200A accelerators. The company is believed to have spare manufacturing capacity in Mexico, so it will be able to ramp up production of AI servers for companies that previously worked with Supermicro.
Photo: Michael Dell
One of the key reasons for Supermicro’s problems is considered to be a delay in filing financial documents, which is why the company risks leaving the Nasdaq exchange. To avoid delisting, Supermicro was required to explain the filing delays and file a Form K-10 report by November 16, but failed to do so. However, Supermicro’s first troubles began much earlier, when Hindenburg Research published a devastating report on the company’s financial statements.
If Supermicro waits until it delists, there will be severe financial consequences, including a precipitous stock price drop and the immediate repayment of $1.725 billion in convertible notes – triggers typically included in agreements and triggered by delisting. Just the other day it was reported that Supermicro lost an order from the Indonesian YTL Group (YTLP) to supply NVIDIA GB200 NVL72 super accelerators for one of the largest AI supercomputers in Southeast Asia. Now only Wiwynn, which belongs to the same Wistron, will handle deliveries. At the same time, Wiwynn itself is now suing X (Twitter), which is owned by Elon Musk.