AI Daily: Dell said to be near $5B server deal with xAI

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

SERVER DEAL: Dell Technologies (DELL) is in advanced stages of securing a deal worth more than $5B to provide Elon Musk’s xAI with servers optimized for artificial intelligence work, Brody Ford of Bloomberg reports, citing people familiar with the matter. Dell will sell servers containing Nvidia (NVDA) GB200 semiconductors to Musk’s startup for delivery this year, sources told Bloomberg.

CHIPS ACT AWARDS: The White House is reassessing awards under the U.S. CHIPS and Science Act, potentially delaying semiconductor funding, Reuters reported. Sources suggest the Biden administration is reviewing agreement terms to align with current policies, which could affect deals established under previous administrations and impact major semiconductor firms. Companies such as GlobalWafers, Intel (INTC), and TSMC (TSM) are reportedly on high alert, while those with existing or planned expansions in China face increased scrutiny.

HUMANOID ROBOTS: Meta (META) has identified that its “next big bet” will be on AI-powered humanoid robots as the company makes “significant investment” into the category and is forming a new team within its Reality Labs hardware division to conduct the work, people with knowledge of the matter told Bloomberg‘s Mark Gurman. Meta plans to work on its own humanoid robot hardware, with an initial focus on household chores, though it aims to make the underlying AI, sensors and software for robots that will be manufactured and sold by a range of companies, the people say. Meta has started discussing its plan with robotics companies, including Unitree Robotics and Figure AI, but does not plan to build a Meta-branded robot initially.

ACQUISITION: flyExclusive (FLYX) has entered into a definitive agreement to acquire the aviation business of Jet.AI (JTAI). flyExclusive will acquire the business in conjunction with Jet.AI’s focus in being a pure-play AI solutions company. The transaction will occur following Jet.AI’s spin of the business into a new company, which would then be acquired by flyExclusive. Jet.AI shareholders will retain their Jet.AI stock and receive new Class A common shares in flyExclusive as part of the transaction. The business combination is contingent upon the closing conditions outlined in the agreement. The business combination is structured as an all-stock transaction, spinning off Jet.AI’s charter business assets into the SpinCo, which in turn will be acquired by flyExclusive. The business combination consideration will be in the form of a number of fully paid and non-assessable shares of Class A common stock of flyExclusive equal to the quotient of the purchase price, divided by the average volume-weighted average price of flyExclusive’s stock for the thirty trading days immediately prior to the effective date. Jet.AI shareholders will retain their Jet.AI stock while receiving new Class A common shares in flyExclusive to account for the portion of the aviation business being spun off.

The purchase price shall be determined based on Jet.AI’s net cash multiplied by the applicable premium percentage. Net Cash of at least $12M is a condition to closing the business combination and will consist of the company’s cash on hand subtracting any cash net working capital requirement mutually agreed upon, and transaction costs triggered by the closing of the business combination. To satisfy closing conditions and to meet the company’s ongoing financing requirements, Jet.AI has signed a $50M non-binding term sheet with Hexstone Capital on economic terms substantially similar to those of its existing $16.5M arrangement with Ionic Ventures. The applicable premium percentage paid for the aviation business will be between 115% and 120% equivalent to a dollar value today contemplated in the range of $12M to $22M, depending on the net cash value at the close of transaction. The transaction is expected to close in the second quarter of 2025, subject to various closing conditions, including but not limited to Jet.AI financing, regulatory review, and shareholder approval.