In a move that could impact Tesla’s self-driving ambitions, emails obtained by CNBC reveal that Elon Musk redirected thousands of Nvidia AI chips originally intended for Tesla to his social media company, X. This decision has reportedly delayed Tesla’s acquisition of $500 million worth of processors.
Read: Ajax Smart Security System Review: Aware and armed alarm
Tesla, aiming to become “a leader in AI and robotics,” is heavily reliant on Nvidia’s H100 AI chips. Earlier this year, Musk announced plans to increase Tesla’s H100 acquisition from 35,000 to 85,000 by year’s end. Additionally, he stated on X (formerly Twitter) that Tesla would invest $10 billion in “combined training and inference AI.”
However, internal Nvidia emails suggest Musk may be inflating Tesla’s AI chip needs. A December memo details how 12,000 H100 processors originally slated for Tesla were diverted to X, specifically its AI subsidiary, xAI. In exchange, X’s orders for 12,000 chips were rerouted to Tesla. Further emails highlight a discrepancy between Musk’s public pronouncements and actual purchases.
Following CNBC’s report, Musk defended his actions on X, claiming Tesla’s unfinished Austin factory lacked capacity for the chips. He also projected Tesla’s 2024 Nvidia chip spend to be $3-4 billion.
This diversion of resources may worry Tesla investors banking on Musk’s promise of fully autonomous vehicles. The company’s planned August unveiling of its first robotaxi comes amidst ongoing scrutiny of its Autopilot and Full Self-Driving features, which have been tied to hundreds of crashes, some fatal.
Meanwhile, Musk’s xAI is locked in a competitive race with OpenAI, Google, and others to develop practical applications for generative AI and its underlying large language models. xAI recently secured $6 billion in funding, promising advanced products and supporting infrastructure.
Nvidia, a leading provider of GPUs that fuel numerous AI endeavours, has capitalized on this high demand. With cloud computing and generative AI driving the market, CEO Jensen Huang noted that customers are “consuming every GPU that’s out there.” The company reported a staggering 200% revenue growth in the last quarter.
