Elon Musk has confirmed that he redirected artificial intelligence chips initially intended for Tesla Inc. to his ventures X Corp. and xAI Corp. Musk offered explanations for the redirected shipment as well as for internal Nvidia Corp. emails that questioned Tesla’s procurement plans.
In a series of posts on X, Musk clarified that Tesla had no immediate need for the Nvidia chips and lacked the infrastructure to utilize them. Previously, CNBC reported that Musk diverted 12,000 of Nvidia’s H100 graphics processing units, originally meant for Tesla, to X, based on an Nvidia memo from December.
Additionally, an email from late April viewed by CNBC indicated that Nvidia staff were aware of statements made by Musk during Tesla’s first-quarter earnings call and on X, which seemed to conflict with the company’s actual bookings with Nvidia.
During the April 23 earnings call, Musk mentioned that around 35,000 H100s were active at Tesla and anticipated having approximately 85,000 operational by year-end. On April 28, he posted on X that Tesla would invest about $10 billion in AI this year. Musk suggested that Nvidia might not be able to track all of Tesla’s AI expenditures, as approximately half of the spending would be internal.
Musk estimated Tesla’s Nvidia purchases for the year to be between $3 billion and $4 billion. Following CNBC’s report, Tesla shares fell as much as 1.3% after the market opened, marking a decline of about 30% for the year.
Musk’s AI development plans within Tesla have come under increased scrutiny, particularly after he threatened in January to shift this work elsewhere unless he was granted around 25% voting control of the company. This demand came shortly before a Delaware court invalidated a compensation package that would have awarded him significant stock options and increased his stake in Tesla. Shareholders are set to vote on this pay deal at the annual meeting on June 13.
Earlier this year, Musk ordered Tesla’s largest-ever layoffs and has been focusing on developing self-driving vehicle technology. Despite long-standing plans to offer an autonomous taxi service, Tesla has yet to establish the necessary infrastructure or obtain regulatory approval for testing robotaxis on public roads.
Musk acquired X (formerly Twitter) for $44 billion in late 2022 and founded xAI the following year. The two companies are closely linked, with Musk stating that investors in X will own 25% of xAI. Last month, xAI announced it had raised $6 billion.
