CNBC reports that Musk requests Nvidia to deliver AI chips initially intended for Tesla to X and xAI

Tesla CEO Elon Musk has communicated to Nvidia the need to prioritize shipments of AI processors for his companies X and xAI over those for the electric-vehicle maker, as reported by CNBC on Tuesday. This strategic decision demonstrates Musk’s focus on advancing artificial intelligence-related development beyond Tesla, prompting some shareholders to question his dedication to the EV firm amidst his involvement in various other ventures.

Furthermore, this development coincides with an upcoming crucial shareholder vote on Musk’s pay package at Tesla. An internal Nvidia memo from December revealed that Musk redirected 12,000 shipped H100 GPUs, originally intended for Tesla, to X instead. As a result, Tesla’s receipt of over $500 million in processors will be delayed by several months.

Musk explained on X that Tesla lacked space to store and operate the Nvidia processors, mentioning the near completion of an expansion at its Giga factory in Texas. This expansion aims to accommodate 50,000 H100s for full self-driving training. Earlier this year, Musk announced plans to increase the deployment of Nvidia’s advanced chips and invest $10 billion in AI initiatives to drive the development of FSD software and robotics.

In addition to Tesla, Musk is actively pursuing AI development at X and xAI, particularly for projects like the chatbot Grok. XAI, launched by Musk in 2023 to compete with ChatGPT-creator OpenAI, recently secured $6 billion in funding. The visionary leader’s dedication to cutting-edge AI technologies is evident in his strategic decisions and ambitious goals for advancing AI both within Tesla and beyond.

Tesla shareholders are set to vote on Musk’s pay package on June 13, a key moment as it is considered one of the largest for a CEO in the corporate landscape. In discussions on X earlier this year, Musk expressed his discomfort in growing Tesla’s leadership in AI and robotics without maintaining approximately 25% voting control. Despite challenges within the EV market and recent global layoffs, Tesla’s commitment to innovation and AI development remains clear.

For inquiries about the matter, Tesla did not provide a comment, while Nvidia declined to offer a response. These recent developments underscore the dynamic nature of the automotive industry and the pivotal role that AI technologies play in shaping its future.