Musk diverts AI chips from Tesla to X and xAI

Musk diverts AI chips from Tesla to X and xAI

Tesla Chips

Elon Musk has instructed Nvidia to redirect shipments of AI chips originally reserved for Tesla to his ventures X and xAI, according to internal emails. This move has delayed Tesla’s receipt of over $500 million worth of processors by several months. Emails circulated within Nvidia reveal that Musk prioritized shipments to X—formerly known as Twitter—and xAI over Tesla, despite Tesla’s significant investment in AI processors.

Musk has frequently stated his ambition to position Tesla as a leader in artificial intelligence and robotics, necessitating ample, advanced processors to build the necessary infrastructure. During an April call, Musk announced that Tesla would increase the number of active H100 AI chips from Nvidia from 35,000 to 85,000 by the year’s end. He also posted on X, claiming that Tesla would spend $10 billion in 2023 on AI training and inference.

In contrast, emails from Nvidia staff suggest these claims might be exaggerated.

Nvidia correspondence highlights that 12,000 H100 GPUs intended for Tesla were redirected to X, causing significant delays for Tesla’s projects, including their autonomous vehicle and humanoid robot initiatives. An Nvidia memo from December stated, “Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead.

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This decision has sparked concern among Tesla shareholders, who question whether Musk is adequately fulfilling his obligations to the electric vehicle company while also managing other ventures.

The delay in GPU shipments is likely to impact Tesla’s ability to develop supercomputers critical for their AI projects, potentially exacerbating existing delays and challenges.

Musk shifts AI chips priorities

Musk’s multiple roles as CEO of Tesla, SpaceX, and owner of X, among other responsibilities, have raised questions about his capacity to effectively manage each of these companies.

Critics argue that Musk’s involvement in diverse, capital-intensive projects may be hindering Tesla’s performance and growth. Despite these concerns, Musk remains confident in his vision. He has promised the development of advanced AI technologies at both Tesla and xAI.

Tesla is set to build a “Dojo” supercomputer and a water-cooled supercomputer cluster, which could aid in developing the artificial intelligence needed for self-driving cars and robotics. At xAI, Musk is competing with other tech giants like OpenAI and Google in the AI space. He is working on building what he claims will be “the world’s largest GPU cluster” in North Dakota, with some capacity expected to be online by June.

Nvidia, now the third-most-valuable company in the world, is struggling to keep up with the soaring demand for its AI chips. CEO Jensen Huang acknowledged the challenge, stating that customers “are consuming every GPU that’s out there.”

Elon Musk and representatives for X and Tesla have not responded to requests for comment. A spokesperson for Nvidia also declined to comment on the matter.

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As Musk continues to juggle multiple high-stakes ventures, Tesla shareholders remain cautious, watching closely how these developments will impact the company’s future.


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