Elon Musk, CEO of Tesla (NASDAQ:TSLA), has instructed Nvidia (NASDAQ:NVDA) to prioritize shipments of AI processors to his companies X and xAI over Tesla, according to a report by CNBC on Tuesday.
This move indicates Musk’s growing focus on artificial intelligence development outside Tesla, raising concerns among some shareholders about his commitment to the electric-vehicle maker while managing several other ventures. The news comes just before a crucial shareholder vote on his compensation package at Tesla.
An internal Nvidia memo from December, cited by CNBC, revealed that Musk redirected 12,000 H100 GPUs originally meant for Tesla to X instead. In return, the original orders for 12,000 H100 GPUs slated for X in January and June will be redirected to Tesla.
This shift will delay Tesla’s receipt of over $500 million in processors by several months, CNBC reported.
Musk stated on X that Tesla currently lacks the infrastructure to store and activate the Nvidia processors, noting that a planned expansion of its Giga factory in Texas, which will house 50,000 H100s for full self-driving training, is nearly complete.
Earlier this year, Musk announced that Tesla would increase the deployment of Nvidia’s most advanced chips and spend $10 billion on AI initiatives this year to advance the development of FSD software and robotics.
Musk is also pursuing AI development at X and xAI, which he launched in 2023 to compete with OpenAI, the creator of ChatGPT. Last month, xAI raised $6 billion in funding.
Tesla shareholders are set to vote on June 13 on Musk’s pay package, considered the largest for a CEO in corporate America. In a January discussion on X about his compensation, Musk expressed discomfort growing Tesla into an AI and robotics leader without having approximately 25% voting control, suggesting he would prefer to develop products outside of Tesla otherwise.
The company did not respond to a request for comment and has been dealing with a slowdown in the EV market, announcing layoffs of more than 10% globally in April.Nvidia also declined to comment.
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