Elon Musk ordered chipmaker Nvidia to divert a $500 million shipment of AI-powered chips originally bound for Tesla to his companies X and AI startup xAI, according to a report by CNBC Tuesday. Now Tesla will have to wait months to receive thousands of Nvidia’s H100 Tensor Core graphics processing units, CNBC reported.
“Elon prioritized X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead,” Nvidia wrote in a December memo. “In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”
Musk made no mention of this during Tesla’s earnings call on April 23. He said that the electric automaker would increase the number of H100 chips supplied by Nvidia from 35,000 to 85,000 by the end of the year. In a post on X days later, Musk appeared to confirm those plans, saying that Tesla would spend $10 billion on “combined training and inference AI.”
Nvidia’s powerful H100 GPUs are designed for data centers, and are typically used for computationally demanding AI training and inference tasks. The data collected from Tesla vehicles is used to improve and refine its AI-powered autonomous driving capabilities.
Driven by an AI development boom, Nvidia’s processors are in high demand, adding to delays in setting up the supercomputers for Tesla. Musk responded to the media reports on Tuesday, claiming the diversion of chips from Tesla was a result of a “logistical issue.”
“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 [Full Self Driving] training,” he wrote on X Tuesday. Tesla plans to build a massive data center at its Texas factory, but the project has been delayed.
The Nvidia chips diversion comes as Tesla is asking shareholders to approve his massive $56 billion pay package that was shot down by a Delaware court in January. The shareholder vote on whether to reinstate it is on June 13.
Musk said that Tesla needs the Nvidia processors to further develop autonomous vehicles and aims for Tesla to be a leader in AI. But he posted on X earlier this year that he wants more control over the company before further pursuing those plans.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” Musk wrote on X in January. “Unless that is the case, I would prefer to build products outside of Tesla.”
