Musk reportedly orders Nvidia to ship AI chips slated for Tesla to X and xAI

Tesla CEO Elon Musk has told Nvidia to prioritize shipments of AI processors to his companies X and xAI over the electric-vehicle maker, CNBC reported on Tuesday.



The news signals Musk is giving precedence to artificial intelligence-related development outside Tesla and fanned concerns some shareholders have raised over his commitment to the EV firm while running a number of other companies.



The development also comes ahead of a crucial shareholder vote on his pay package at Tesla.



“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 internal Nvidia memo from December showed, according to the CNBC report.



“In exchange, original X orders of 12K H100 slated for Jan and June to be redirected to Tesla,” the memo said.



The change delays Tesla’s receipt of more than $500 million in processors by months, according to CNBC.



In a post on X, Musk said Tesla had no place to store and turn on the Nvidia processors, adding that a planned expansion of its Giga factory in Texas was almost complete. “This will house 50k H100s for FSD (full self-driving) training.”



He announced earlier this year Tesla was increasing the number of Nvidia’s most advanced chips it has deployed and will spend $10 billion on AI this year, as part of initiatives to advance the development of FSD software and robotics.



The billionaire is also pursuing AI development at X, and xAI , for chatbot Grok, among other applications. XAI, which Musk launched in 2023 to challenge ChatGPT-creator OpenAI , raised $6 billion in funding last month.



Tesla shareholders will vote on June 13 on a pay package for Musk that is considered to be the largest for a CEO in corporate America.



In a discussion on X related to his pay in January, Musk said: “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. . . . Unless that is the case, I would prefer to build products outside of Tesla.”



The company, which did not respond to a request for comment, has been battling a slowdown in the EV market and announced layoffs of more than 10% globally in April.



Nvidia declined to comment.



—Yuvraj Malik, Reuters