Key Points:
- Elon Musk redirected a significant shipment of Nvidia AI chips from Tesla to his social media company, X.
- The diversion has delayed Tesla’s receipt of over $500 million of GPUs, impacting its AI and robotics projects.
- Correspondence from Nvidia staff revealed inconsistencies between Musk’s public statements and actual chip bookings.
- Musk claimed the chips would have remained unused at Tesla, and he plans to house 50,000 H100s in the Texas Gigafactory for future projects.
Elon Musk’s ambition to transform Tesla into a leader in AI and robotics is facing scrutiny after internal emails from Nvidia revealed a significant diversion of AI processors from Tesla to Musk’s social media company, X (formerly Twitter). This move has raised concerns among Tesla shareholders about Musk’s commitment and prioritization of his various ventures.
During Tesla’s first-quarter earnings call in April, Musk announced plans to increase the number of Nvidia’s H100 AI chips from 35,000 to 85,000 by the end of the year. He also indicated that Tesla would spend $10 billion on AI training and inference in 2023. However, Nvidia’s internal communications suggest Musk exaggerated Tesla’s procurement plans.
The emails indicate that Musk redirected a large shipment of AI processors (originally intended for Tesla) to X. This diversion has pushed back Tesla’s receipt of over $500 million worth of GPUs by months, likely delaying the development of its autonomous vehicle and robotics projects.
Tesla shares dropped as much as 1% following this revelation on Tuesday morning. Nvidia staff correspondence detailed how Elon Musk prioritized X’s H100 GPU cluster deployment over Tesla, reallocating 12,000 GPUs to X. This decision has aggravated an ongoing conflict between Musk and some Tesla shareholders, who question whether he is sufficiently dedicated to Tesla amid his involvement with multiple companies.
Nvidia’s recent email from late April pointed out inconsistencies between Musk’s public statements and actual bookings, highlighting concerns over Tesla’s drastic layoffs and potential delays in setting up the H100 project at the Texas Gigafactory. The new information underscores shareholder worries about Musk’s ability to balance his responsibilities across Tesla, SpaceX, Neuralink, The Boring Company, and X, especially given the substantial resources and capital required for each.
Musk has faced criticism for treating his companies as extensions of his persona, making unilateral decisions that often benefit his broader business interests. For instance, after acquiring Twitter, he enlisted Tesla engineers and staff to implement changes to the social media platform. Additionally, xAI, Musk’s AI startup, has recruited several former Tesla employees, further entangling his business ventures.
Elon Musk has publicly defended his decision, stating that Tesla had no immediate use for the Nvidia chips and that they would have remained in storage. He assured that the south extension of the Texas Gigafactory would soon house 50,000 H100s for training self-driving technology.
