• Oracle hosts xAI Grok model.
• xAI to use Oracle Cloud to train future Groks.

Oracle is adding Grok, the large language model developed by Elon Musk’s xAI, to its Generative AI services. The move is part of a deal where Oracle will host and run xAI’s models on its cloud infrastructure. In return, xAI will use Oracle Cloud to train and deploy the next versions of Grok.

The update puts xAI’s models alongside other options already available on Oracle’s platform, including models from Meta, Cohere, and Mistral. Oracle is also an investor in Cohere.

This kind of partnership isn’t unusual. As more generative AI tools are developed, cloud providers strive to offer a wider mix of models to customers. The goal is to cover more uses like research and content generation.

“There is a convergence of leading AI innovators on OCI,” said Federico Torreti, senior director at Oracle.

Matt Kimball, an analyst at Moor Insights & Strategy, said the move fits Oracle’s focus on customer demand, not chasing rivals. He noted that both xAI and Oracle serve industries like healthcare, finance, and legal – fields where Grok models could be useful.

“There’s a fine line between delivering choice and chaos,” Kimball said. “OCI seems to be striking that balance nicely.”

Microsoft also recently added Grok to its Azure AI Foundry, its platform for developers and researchers. Kimball said this latest move brings Oracle in line with Azure, giving customers access to Grok.

Some see Oracle’s hardware design as another reason it makes sense for AI training. Holger Mueller of Constellation Research pointed out that Oracle’s infrastructure – originally built for databases – connects storage and compute in a way that also benefits GPU workloads. “Turns out the same setup works well for AI,” he said.

Others are more cautious. David Nicholson, an analyst at Futurum Group, said Oracle lags behind other cloud providers and questioned whether the company can deliver what it’s promising. “Every time Oracle announces something like this, there’s a lot of back-end work needed to make it real,” he said. “It’s too early to know if this will bear fruit.” He said the deal reflects how much pressure cloud vendors are under to compete in the AI space.

Kimball believes the partnership could benefit both sides. Oracle already stores a lot of business and historical data, and bringing xAI’s models to that data, he said, could help users get more out of what they already have – and help xAI reach more customers.

While Oracle and Microsoft are expanding model access, Google has launched updates to its Gemini 2.5 models, including a version that lets users control how much processing power the model uses with an API setting.

xAI may raise another $4.3 billion

Meanwhile, Musk’s AI startup xAI is reportedly raising more money. According to Bloomberg, the company is looking for $4.3 billion in equity funding, on top of an existing $5 billion debt round.

Since launching in 2023, xAI has already raised around $14 billion through equity deals. But running advanced AI systems is expensive – hardware costs are high, training takes a lot of computing power, and skilled AI talent isn’t cheap. Bloomberg’s report says xAI has already used up most of the money it raised earlier. Sources say xAI may get a $650 million rebate from one of its chip suppliers, which could help offset some of its costs.

The company’s valuation has jumped in the past few months, from $51 billion at the end of 2024 to $80 billion by March this year. Rival OpenAI is also raising more funds and is reportedly targeting up to $40 billion more debt.

Elon Musk helped found OpenAI in 2015 but left its board in 2018. xAI, now running independently, acquired Musk’s social platform X earlier this year.