Elon Musk redirects NVIDIA chips intended for Tesla to xAI
What's the story
Tesla CEO Elon Musk has directed NVIDIA, a prominent tech firm, to prioritize the delivery of AI processors to his other ventures, X and xAI. This decision is seen as Musk emphasizing artificial intelligence development outside Tesla, raising questions about his dedication to the electric vehicle company. An internal NVIDIA memo from December disclosed that Musk is prioritizing the deployment of X H100 GPU cluster at X over Tesla.
Impact analysis
Musk's decision delays Tesla's processor receipt
Musk's decision will postpone Tesla's acquisition of over $500 million in processors for several months, according to CNBC. The memo revealed that 12,000 H100 GPUs originally intended for Tesla are being redirected to X. Musk justified this move by stating that Tesla lacked the space to store and activate the NVIDIA processors, adding that an expansion of its Texas Giga factory was nearing completion.
Future prospects
Musk's AI investment and expansion plans
Earlier this year, Musk announced that Tesla would increase its deployment of NVIDIA's most advanced chips and invest $10 billion in AI. This investment is part of initiatives to advance the development of full self-driving (FSD) software and robotics. Additionally, Musk is focusing on AI development at X and xAI for applications such as the chatbot Grok. The Texas Giga factory expansion will house 50,000 H100s for FSD training.
Funding success
Musk's xAI raises $6 billion amidst Tesla concerns
xAI, a company launched by Musk in 2023 to rival ChatGPT-creator OpenAI, recently secured $6 billion in funding. High-profile investors such as Andreessen Horowitz and Sequoia Capital backed the funding round. xAI has hinted at imminent technology updates and product announcements. This comes as Tesla shareholders prepare to vote on a pay package for Musk, considered the largest for a CEO in corporate America.