Elon Musk instructed American tech giant Nvidia to prioritize shipments of graphics processing units (GPUs) to his other ventures, X and xAI, over Tesla, CNBC reports, citing leaked emails.
Internal emails reveal Tesla boss’ request to divert $500M shipment to other companies
Recent emails circulating at Nvidia revealed that Tesla Chief Executive Elon Musk asked them to prioritize processor shipments to X and xAI over the electric vehicle giant.
The news suggests that CEO Musk focuses on artificial intelligence-related development outside Tesla. It stimulated concerns among several shareholders over the Tesla boss’ commitment to the electric automaker while managing multiple companies.
It also comes ahead of the looming shareholder vote on Tesla CEO Musk’s $56 billion compensation package at the annual meeting on June 13, 2024.
“Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12K of shipped H100 GPUs originally slated for Tesla to X instead. In exchange, original X orders of 12K H100 slated for Jan and June to be redirected to Tesla.”
Internal Nvidia memo from December
As per the report, the shipment diversion delayed Tesla’s receipt of over $500 million in processors by months.
A more recent Nvidia email from late April also highlighted a discrepancy between CEO Musk’s public statements about Tesla’s AI spending and their actual chip purchases. In addition, it expresses concern that recent layoffs could slow down the “H100 project” at Tesla’s Giga Texas.
Despite announcing a $10 billion investment in AI computing for Tesla this year, an email suggests that the company’s chip purchases and future projections don’t match this level of spending. Additionally, other emails exposed that Tesla is seeking GPUs for xAI’s “world’s largest cluster” project due to launch in June, potentially conflicting with Tesla’s needs.
Musk faces scrutiny over prioritizing GPUs for X
These leaked emails underlined the growing conflict between CEO Musk and several anxious Tesla shareholders.
They continue to doubt CEO Musk’s capability to effectively fulfill his responsibilities to the electric vehicle giant while also running multiple companies. Apart from Tesla, these companies, including X and xAI, require CEO Musk’s attention, resources, and significant capital.
Critics even claim that Musk is a mere “part-time” CEO at Tesla. He is also the CEO of the aerospace firm SpaceX, a founder of brain-computer interface startup Neuralink, and tunneling company The Boring Co.
He also purchased social media platform X (former Twitter) for $44 billion in late 2022. The following year, he launched a new AI startup, xAI.
Notably, X and xAI are heavily tied. The American billionaire announced on X in November 2023 that “X Corp investors will own 25% of xAI.” The AI startup also uses some of X’s data center capabilities to train and run its powerful language models for the Grok chatbot.
Musk denies prioritization, cites Tesla production delays
Tesla CEO Elon Musk denied the allegations of prioritization, saying that the electric automaker was not ready to receive GPU delivery at the time.
In response to news shared on X, the Tesla boss explained, “Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse.”
CE Musk further shared that Giga Texas’ south extension is nearing completion, which can accommodate 50,000 GPUs for FSD training.
“Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse. The south extension of Giga Texas is almost complete. This will house 50k H100s for FSD training.”
Tesla CEO Elon Musk
It may be true that Tesla was not yet ready to receive that computing power, considering the delay of the previously announced 100 MW cluster at Giga Texas, which is now set for August.
Tesla CEO’s recent chip shipment decision has reignited discussions about the electric automaker’s corporate governance. Some critics suggest clear guidelines are crucial to address potential conflicts as CEO Musk also has leadership roles in multiple companies.
