Elon Musk Redirects Nvidia Chips to Alternative Projects, Citing Lack of Use at Tesla

Elon Musk, CEO of Tesla Inc. (TSLA), caused a stir in the tech community this Tuesday with news emerging about the reassignment of thousands of Nvidia Corporation (NVDA) chips. These chips, which were originally earmarked for Tesla, have instead been directed to other ventures Musk is involved with, namely X, previously known as Twitter, and a project named xAI.

Elon Musk's Explanation

In an explanation regarding the move, Musk stated that due to the lack of appropriate facilities at Tesla to utilize the Nvidia chips, they would not have been activated and would have just collected dust in storage. As a result, he decided to divert them to where they could be immediately put to use. Additionally, Musk mentioned that Tesla is nearing the completion of its Giga Texas expansion, which is set to accommodate 50,000 H100 chips for training the company's Full Self-Driving (FSD) systems.

The Impact on Tesla

Internal emails from Nvidia hinted at an order by Musk to reroute 12,000 H100 GPUs to X, causing a delay in Tesla's plans and a potential shortfall of over $500 million in Nvidia GPUs. Musk had ambitious plans to boost the number of H100 chips for Tesla from 35,000 to 85,000 by the year's end, a goal integral to advancing Tesla's autonomous vehicle and robotics endeavors.

The Future of AI Investments

Earlier in the week, Musk also shed light on xAI's future strategies, indicating an investment in Nvidia's AI chips, notably the Blackwell B200s. His comments also suggested a cautious approach to investing in current tech like Nvidia's H100s due to rapid advancements in the technology landscape. In a nod to Tesla's prowess in the autonomous vehicle market, Musk referenced Jensen Huang, CEO of Nvidia, who acknowledged Tesla's advanced position in the self-driving car space.

Musk, Nvidia, Tesla