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  • June 4, 2024
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Elon Musk on a blue background
Illustration by Laura Normand / The Verge

Elon Musk ordered thousands of Nvidia-made AI chips destined for Tesla to be diverted to his social media company X, according to emails from the chipmaker obtained by CNBC. The move has the potential to delay Tesla’s acquisition of $500 million worth of processors by months, the outlet reports.

Tesla is supposed to be stocking up on Nvidia’s H100 artificial intelligence chips in order to power its transformation into “a leader in AI and robotics,” according to Musk. In an Tesla earnings call earlier this year, he said the company would increase its acquisition of H100s from 35,000 to 85,000 by the end of this year. And later, in a post on X, Musk said that Tesla would spend $10 billion “in combined training and inference AI, the latter being primarily in car.”

Tesla will spend around $10B this year in combined training and inference AI, the latter being primarily in car.

Any company not spending at this level, and doing so efficiently, cannot compete.

— Elon Musk (@elonmusk) April 28, 2024

But emails by Nvidia employees obtained by CNBC suggest that Musk is exaggerating the purchase of AI chips for Tesla. Instead, many of those processors are now en route to X — and primarily its AI subsidiary, xAI.

“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,” an Nvidia memo from December said, according to CNBC. “In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.” In follow-up messages, Nvidia employees noted that Musk’s comments during the earnings call and in subsequent posts on X “conflicts with bookings.”

The move to divert AI chips from Tesla to X could rankle Tesla investors, who are betting on Musk delivering his promise of fully autonomous vehicles. The company plans to unveil its first robotaxi vehicle at an event in August. Meanwhile, Tesla’s Autopilot and Full Self-Driving driver-assist features, which serve as a bedrock for the company’s autonomy work, have come under scrutiny for hundreds of crashes, dozens of which have resulted in fatalities.

Musk’s AI startup, xAI, is racing against OpenAI, Google, and others to produce useful applications for generative AI and their underlying large language models. Last month, the company announced a $6 billion funding round on the promise of advanced products and the infrastructure to support them.

Nvidia has become the third most valuable company in the world on the demand of its GPUs, which power much of the AI ambitions of other companies. With cloud computing and generative AI, customers “are consuming every GPU that’s out there,” Nvidia CEO Jensen Huang said on an earnings call in May, according to CNBC. The company reported 200 percent revenue growth during the last quarter.

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