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Musk Urges Nvidia to Prioritise AI Chip Shipments to X and xAI

Elon Musk has requested that Nvidia prioritise AI chip shipments to his other firms, X and xAI, before Tesla. This decision has aroused doubts among Tesla stockholders about Musk's dedication to the electric vehicle company. The change in allocation has caused a delay of over $500 million in processors for Tesla.

This choice demonstrates Musk's interest on artificial intelligence development outside of Tesla and raises issues about his loyalty to the electric car (EV) behemoth.

The motion comes just before a critical shareholder vote on Musk's compensation plan at Tesla. An internal memo from Nvidia in December revealed that Musk had redirected 12,000 H100 GPUs originally intended for Tesla to X, in exchange for X's orders of 12,000 H100 GPUs to be redirected to Tesla. This change in allocation has resulted in a delay of over US$500 million worth of processors for Tesla, according to CNBC.

Musk explained the decision in a post on X, claiming that Tesla currently has the requisite storage and infrastructure to support the Nvidia processor. However, he informed stakeholders that the expansion of Tesla's Giga plant in Texas is nearly finished and will soon house 50,000 H100s for full self-driving (FSD) training.

Earlier this year, Musk promised that Tesla would increase its use of Nvidia's sophisticated chips while investing $10 billion in AI programmes. These projects are intended to advance the development of FSD software and robotics. Meanwhile, Musk is aggressively working on AI development at X and xAI, mainly for the chatbot Grok and other applications. XAI recently raised an amazing $6 billion in funding to take on OpenAI, the creator of ChatGPT.

Tesla shareholders will vote on Musk's remuneration package on June 13, which is believed to be the biggest for a CEO in corporate America. During an X discussion earlier this year, Musk highlighted his dissatisfaction with Tesla's gaining leadership in AI and robots without major voting influence. He claimed that if he does not have at least 25% voting control, he intends to focus on developing goods outside of Tesla.

Tesla, which has been dealing with a slump in the EV industry, announced a global layoff of more than 10% in April. Neither Tesla nor Nvidia have issued an official statement on the topic.

  • Elon Musk has asked Nvidia to prioritise AI chip shipments to his other companies, X and xAI, over Tesla.

  • This decision has raised concerns among Tesla shareholders about Musk's commitment to the EV giant.

  • The change in allocation has resulted in a delay of over $500 million worth of processors for Tesla.


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