Elon Musk diverts Nvidia AI chips booked for Tesla to X, xAI: report

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 comes ahead of a crucial shareholder vote on his pay package at the company.

“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.

Musk said 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.

He has also promised to set up supercomputer clusters in New York and Austin, part of initiatives to advance the development of self-driving software and robotics.

He is pursuing AI development at X, formerly Twitter, and xAI, for chatbot Grok, among other applications.

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, 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.”

Tesla, 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.

Tesla shares fell less than 1%.