CNBC reports: Musk requests Nvidia to deliver AI chips scheduled for Tesla to X and xAI instead

Tesla CEO Elon Musk has reportedly instructed Nvidia to prioritize shipments of AI processors to his companies X and xAI over Tesla, raising concerns about his commitment to the electric-vehicle maker. This news emerges as Tesla faces a crucial shareholder vote on Musk’s pay package. The internal Nvidia memo from December revealed that Musk redirected 12K H100 GPUs slated for Tesla to X, delaying Tesla’s receipt of over $500 million in processors. Musk explained that Tesla had no space to store and utilize the Nvidia processors, as an expansion of its Giga factory in Texas was nearing completion to house 50k H100s for FSD training. Musk previously announced plans to increase the deployment of Nvidia’s advanced chips and invest $10 billion in AI this year to enhance FSD software and robotics development.

### Prioritizing AI Development
Musk’s decision to prioritize AI processors for X and xAI over Tesla highlights his focus on advancing artificial intelligence-related projects outside of the electric-vehicle company. This move aligns with Musk’s vision to lead in AI and robotics, as demonstrated by XAI’s recent fundraising success and initiatives to enhance chatbot Grok. However, this shift in priorities has raised questions about Musk’s dedication to Tesla and the impact on the company’s future projects and operations.

### Impact on Tesla’s Operations
The redirection of AI processors from Tesla to X poses challenges for the electric-vehicle maker’s development timeline and goals. With delays in receiving crucial components for FSD training, Tesla may face setbacks in implementing advanced AI technologies in its vehicles. This decision also underscores the need for Tesla to streamline its production and storage capabilities to accommodate future AI advancements, especially as the company aims to stay competitive in the rapidly evolving EV market.

### Shareholder Concerns and Pay Package Vote
As Tesla shareholders prepare to vote on Musk’s record-breaking pay package, concerns about his leadership and priorities come to the forefront. Musk’s pivotal role in spearheading AI initiatives at X and xAI raises questions about his ability to effectively manage multiple companies while ensuring Tesla’s growth and success. Shareholders will need to carefully consider the implications of Musk’s AI-related decisions on Tesla’s long-term strategy and financial performance.

### Future of AI Development at Tesla
Despite the challenges posed by the prioritization of AI processors for X and xAI, Tesla remains committed to advancing its AI capabilities and integrating cutting-edge technologies into its vehicles. The company’s ongoing investments in AI research and development, as well as partnerships with industry leaders like Nvidia, demonstrate Tesla’s dedication to staying at the forefront of AI innovation in the automotive sector. As Tesla continues to evolve its AI-powered technologies, the company will need to address operational challenges and align its strategic priorities to maintain its position as a leader in the EV market.

### Conclusion
Elon Musk’s decision to prioritize AI processors for X and xAI over Tesla reflects his commitment to advancing artificial intelligence-related projects across his companies, raising questions about his leadership and dedication to the electric-vehicle maker. As Tesla faces a crucial shareholder vote on Musk’s pay package and navigates challenges in the EV market, the company must carefully balance its AI development efforts with operational needs and long-term strategic goals. By addressing shareholder concerns, enhancing production capabilities, and staying at the forefront of AI innovation, Tesla remains poised to drive the future of electric vehicles and autonomous technologies.

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