Elon Musk confirmed he diverted thousands of Nvidia AI chips away from Tesla Inc. to his X Corp. and xAI Corp. Ventures. Musk also offered explanation both for the redirected shipment and internal Nvidia Corp. emails casting doubt on the carmaker’s procurement plans. The chip divert move has the potential to delay Tesla’s acquisition of $500 million worth of processors by months, the outlet reports.
Musk divert AI chips from Tesla
On Tuesday in a series of post on X, Musk wrote that Tesla had no place to put Nvidia chips where they could be turned on. As per reports, Musk had redirected 12,000 of the chipmaker Nvidia’s H100 graphics processing units originally slated for Tesla to X instead, citing an Nvidia memo from December.
Also as per Nvidia staff, Musk made the statements on AI chips divert during the Tesla’s first-quarter earnings call and on X that conflicted with the company’s bookings with the chipmaker.
Tesla on chip diversion
The Tesla chief executive officer said during the April 23 earnings call that roughly 35,000 of the company’s H100s were active, and he expected the electric-vehicle maker to have around 85,000 working by year-end. On April 28, he wrote on X that Tesla will spend around $10 billion this year on AI.
Tesla’s supercomputer
Musk suggested in one of his posts Tuesday that Nvidia wouldn’t be able to track all the money Tesla is spending on AI this year, writing that about half of its expenditures will be internal. The company is working on its own supercomputer as part of broader efforts to develop self-driving technology. It also procures sensors for all of its cars, regardless of whether consumers pay extra for its more advanced driver-assistance system.
“My current best guess for Nvidia purchases by Tesla are $3B to $4B this year,” Musk wrote.
Musk’s compensation package scrutiny
Musk’s plans for developing AI within Tesla have come under greater scrutiny since he threatened in January to take that work elsewhere unless he’s awarded around 25% voting control of the EV maker. Weeks after making that demand, a Delaware court voided the compensation package that would have awarded him tens of billions of dollars worth of stock options and boosted his stake in the carmaker. Tesla shareholders will vote on the pay deal again at its June 13 annual meeting.
Tesla layoffs
Musk ordered up Tesla’s biggest-ever layoffs earlier this year and is staking its future on self-driving vehicle development. While the idea of offering an autonomous taxi service has been kicking around the company for at least eight years, Tesla has yet to stand up much of the infrastructure it would need, nor has it secured regulatory approval to test robotaxis on public roads.
X and xAI link
The billionaire acquired X, the company formerly known as Twitter, for $44 billion in late 2022 and founded xAI the following year. The two companies are closely linked, with Musk having said late last year that investors in X will own 25% of xAI. The latter company announced last month that it had raised $6 billion.
Tesla shares
Following the news of Musk diverting AI chips, Tesla shares erased all the gains in early trading. The Tesla shares fell as much as 1.3% after the open. Stock of Tesla has dropped about 30% this year.
