Elon Musk, the Chief Executive Officer of Tesla Inc., recently confirmed reports that he diverted around 12,000 Nvidia H100 graphics processing units (GPUs) from Tesla to his other enterprises, X (formerly known as Twitter) and xAI. This information initially surfaced through a report by CNBC, which cited emails and memos from Nvidia.
In a post on X, Musk explained the rationale behind this reallocation, stating that Tesla currently lacks the necessary facilities to utilize these GPUs. He mentioned that without suitable infrastructure, these high-performance AI chips would have merely remained in a warehouse, unutilized. Musk assured that the GPUs are not being wasted but are temporarily redirected until Tesla is ready to deploy them.
Tesla is actively working on constructing supercomputers designed to enhance its Full Self-Driving (FSD) technology. Musk highlighted that the Giga Texas facility, nearing completion, will eventually accommodate 50,000 H100 GPUs to support the FSD training. He also projected that Tesla would likely invest between $3 billion to $4 billion in Nvidia chips within this year.
However, the decision to redirect these chips has sparked controversy. According to CNBC, the reallocation might cause significant delays in Tesla’s plans to set up its supercomputers, potentially postponing advancements in its self-driving technology. This situation has led to renewed criticism from shareholders who are concerned that Musk’s attention is overly divided among his multiple ventures, potentially impacting his focus on Tesla.
This controversy is particularly significant as it coincides with Tesla’s annual shareholder meeting scheduled for June 13. Among the key issues up for vote is Musk’s substantial $56 billion pay package, which has been a point of contention for many shareholders.
The news had a tangible impact on the stock market. Tesla shares dipped nearly 1% on Tuesday, adding to a year-to-date decline of about 30%. In contrast, Nvidia’s stock experienced a 1.3% increase on the same day, continuing a remarkable rise of 135% in 2024. This contrasting stock performance underscores the market’s varied reactions to the developments surrounding these two tech giants.
Musk’s move to reallocate the GPUs reflects the complex balancing act he performs in managing multiple high-stakes ventures simultaneously. While his diverse portfolio showcases his ambitious vision, it also brings challenges in terms of focus and resource allocation, issues that are closely scrutinized by investors and industry analysts alike.