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For years, Tesla has invested heavily in artificial intelligence and devoted massive resources toward advancing driver assistance technology, humanoid robots, and data centers. But Elon Musk appears to be prioritizing his own private AI ventures over Tesla, according to a new report from CNBC.
During Tesla’s first-quarter earnings call in April, Musk told investors that the electric vehicle maker would drastically increase the number of active AI chips, it buys from Nvidia, to 85,000 from 35,000 this year. Musk added in a later tweet that Tesla will spend $10 billion in 2024 “in combined training and inference AI, the latter being primarily in car.”
The Tesla CEO’s comments “conflicts with bookings” and financial forecasts, according to correspondence from Nvidia staffers reviewed by CNBC. Nvidia memos reveal that Musk ordered the chip maker to let his X Corp., formerly Twitter, cut in line ahead of Tesla. He also pushed back more than $500 million in graphics processing units ordered by Tesla by months.
“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 a statement posted on X after CNBC’s story was published, Musk said that Tesla didn’t have a place to send the chips and that they would have sat in a warehouse. He added that an extension to Tesla’s factory in Texas is “almost complete” and will house 50,000 chips to train its Full Self-Driving software.
X is closely linked to Musk’s AI startup xAI, started last year to compete with OpenAI and recently raised $6 billion. Some of the startups’ capacity is used to help train the large language models behind X’s Grox chatbot, according to CNBC.
Musk’s prioritization of his own ventures is likely to further frustrate his critics, many of whom argue that he is spread too thin across his portfolio, which includes aerospace giant SpaceX, brain-computer interface startup Neuralink and tunneling startup The Boring Co. It also highlights Musk’s personal gripes with advancing technology at Tesla without having greater control.
Meanwhile, Tesla is increasingly reliant on AI-based projects to assuage investors’ concerns. Morgan Stanley places just a fraction of its price target on Tesla’s core auto business, and is projecting that Tesla’s “Dojo” supercomputer could add $500 billion to its valuation. The automaker is also working on deploying self-driving vehicles, promising a demonstration later this summer, and mass-deployment of its humanoid robots, Optimus.
Musk currently owns 13% of Tesla’s outstanding shares, but wants a greater slice of the pie before the company continues to advance its AI goals.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control,” Musk wrote in January on X. “Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla.”
His comments have irritated some major investors and analysts, including Leo KoGuan, Tesla’s largest retail shareholder. KoGuan has repeatedly criticized Musk and called out a series of perceived conflicts of interest, including how some Tesla workers were enlisted to help fix issues at X.
“Absolutely conflict of interests against Tesla,” KoGuan wrote on May 28. “Where are [the regulators]?”
Several Tesla engineers have left the automaker to join xAI, in what, Musk says, was a necessary move to prevent them from joining OpenAI. He also promoted a series of posts on X calling for AI experts to join xAI, which critics cite as another example of his favoring his personal project over Tesla.
Shareholders on June 13 will vote on whether to approve Musk’s multibillion compensation plan, struck down by a judge in January. That plan includes stock options which would raise his control to 20.5% from 13%.
Updated: This story has been updated to include comments from Tesla CEO, X owner, and xAI founder Elon Musk.