Home Editor's Pick Musk Responds to Claims of Prioritizing X and xAI Over Tesla After Diverting Nvidia AI Chips

Musk Responds to Claims of Prioritizing X and xAI Over Tesla After Diverting Nvidia AI Chips

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TLDR

Emails from Nvidia staff suggest that Elon Musk diverted 12,000 H100 AI chips originally meant for Tesla to his social media company X and AI startup xAI.
Musk’s decision pushed back Tesla’s receipt of over $500 million in GPUs by months, potentially delaying the automaker’s AI infrastructure development.
Musk responded to the claims, stating that Tesla had no place to put the chips and they would have sat idle in a warehouse, and the south extension of Tesla’s Texas Gigafactory will soon house 50,000 H100s for self-driving technology training.
The reports have exacerbated tensions between Musk and some Tesla investors who feel he has conflicts of interest and is not fulfilling his obligations to the automaker.
Musk’s companies, including xAI and Neuralink, are competing in the AI and brain-to-computer interface sectors against giants like OpenAI and Google.

Recent reports suggest that Tesla CEO Elon Musk instructed Nvidia to prioritize shipments of AI chips to his social media company X and AI startup xAI over the electric vehicle manufacturer.

Emails from Nvidia staff, obtained by CNBC, indicate that Musk diverted 12,000 H100 GPUs originally slated for Tesla to X, pushing back the automaker’s receipt of over $500 million in processors by months.

The decision has raised concerns among some Tesla shareholders, who question whether Musk is fulfilling his obligations to the company while also running several other ventures that require significant attention and resources.

Critics argue that Musk is only a part-time CEO of Tesla, the company responsible for the majority of his wealth, as he also manages SpaceX, Neuralink, The Boring Company, and the recently acquired X (formerly Twitter).

Musk has been encouraging Tesla investors to focus on future products, such as AI software for self-driving vehicles, dedicated robotaxis, and a driverless transportation network.

He has emphasized the importance of Nvidia’s GPUs in achieving these goals, stating that Tesla will increase the number of active H100s from 35,000 to 85,000 by the end of the year. However, the Nvidia emails suggest that Musk may have exaggerated Tesla’s procurement plans to shareholders.

In response to the reports, Musk took to X to clarify the situation. He stated that Tesla had no place to put the Nvidia chips where they could be turned on and that they would have sat idle in a warehouse.

Musk added that the south extension of Tesla’s Texas Gigafactory is near completion and will house 50,000 H100s for self-driving technology training.

Laura “Liar” Kolodny

— Elon Musk (@elonmusk) June 4, 2024

Despite Musk’s explanation, the reports have exacerbated tensions between the billionaire entrepreneur and some Tesla investors.

The company’s stock price has dropped nearly 30% this year, as it faces a sales decline due to aging electric vehicle lineups and increased competition.

Some shareholders have expressed concern over Musk’s ability to manage his various companies effectively while ensuring Tesla remains a leader in the electric vehicle and AI markets.

Musk’s other ventures, particularly xAI and Neuralink, are competing in the rapidly evolving AI and brain-to-computer interface sectors.

xAI recently introduced the Grok chatbot as a “non-woke” alternative to OpenAI’s ChatGPT, while Neuralink has received FDA approval to begin human trials for its brain-to-computer interface technology.

The post Musk Responds to Claims of Prioritizing X and xAI Over Tesla After Diverting Nvidia AI Chips appeared first on Blockonomi.

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