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Elon Musk envisions Tesla as a future leader in AI and robotics, a goal that requires extensive use of Nvidia's high-powered processors. During Tesla's first-quarter earnings call in April, Musk announced plans to increase the number of Nvidia’s flagship H100 AI chips from 35,000 to 85,000 by the year's end. He also posted on X (formerly Twitter) that Tesla would invest $10 billion in AI this year.
However, internal emails from Nvidia suggest Musk may have exaggerated Tesla's procurement plans to shareholders. These emails also reveal Musk redirected a significant shipment of AI processors intended for Tesla to his social media company, X, delaying Tesla’s receipt of over $500 million in GPUs. This diversion could impede Tesla's efforts to build the supercomputers needed for developing autonomous vehicles and humanoid robots.
One Nvidia memo from December detailed Musk's decision to prioritize X over Tesla, rerouting 12,000 H100 GPUs originally allocated for Tesla. In return, orders originally placed for X were to be redirected to Tesla later. A subsequent Nvidia email from April highlighted conflicts between Musk's statements and actual bookings, exacerbated by ongoing layoffs at Tesla that could further delay critical projects.
The emails underscore a growing tension between Musk and Tesla shareholders concerned about his ability to manage multiple companies effectively. Critics argue Musk, who also leads SpaceX, Neuralink, The Boring Company, and xAI, is spreading himself too thin and not fully committing to Tesla, which is experiencing a sales decline and increased competition. This concern is reflected in Tesla’s stock price, which has fallen 29% this year.
Musk's ambitious plans for Tesla include AI software to enable self-driving cars, robotaxis, and a driverless transportation network. To achieve this, Tesla needs Nvidia’s GPUs, which are in high demand. Nvidia, now the world's third-most-valuable company, is struggling to keep up with this demand. CEO Jensen Huang emphasized the challenge of allocating GPUs fairly among major tech players, including xAI, which Musk launched to compete with OpenAI and others in the AI space.
Musk's actions have sparked controversy, with critics accusing him of prioritizing his personal ventures over Tesla. The internal emails reveal that Musk diverted crucial AI resources from Tesla to X, a move that could delay Tesla’s AI projects. This decision aligns with Musk's history of intermingling resources among his companies, often at the expense of Tesla.
In response to the controversy, Musk posted on X that Tesla had no immediate use for the Nvidia chips, claiming they would have been idle in a warehouse. He assured that the Texas Gigafactory would soon house 50,000 H100s for training self-driving technology.
As Musk juggles his many ventures, Tesla shareholders are left questioning whether their CEO can deliver on his promises while managing a growing list of responsibilities. The future of Tesla’s AI and robotics ambitions remains uncertain, hinging on Musk’s ability to balance his commitments and secure the necessary resources amidst fierce competition for Nvidia’s coveted technology.
