Technology
Tuesday, June 4th, 2024 4:12 pm EDT
Key Points
- Elon Musk wants Tesla to be a leader in AI and robotics but needs expensive Nvidia GPUs to build the necessary infrastructure.
- Emails reveal Musk diverted a shipment of GPUs meant for Tesla to his social media company X (formerly Twitter), delaying Tesla’s AI projects.
- This raises conflict of interest concerns as Musk is CEO of both Tesla and X, and some shareholders question his commitment to Tesla.
Elon Musk has ambitious plans for Tesla to become a leader in artificial intelligence (AI) and robotics, but internal emails from Nvidia show a potential conflict of interest as he prioritizes his new startup xAI.
Tesla needs a significant amount of Nvidia’s powerful graphics processing units (GPUs) to build the necessary supercomputer infrastructure for its AI projects. Musk publicly stated Tesla would increase its H100 GPUs from Nvidia to 85,000 by year-end and invest $10 billion in AI training.However, Nvidia emails reveal Musk diverted a large shipment of H100 processors originally intended for Tesla to his social media company, X (formerly Twitter). This delayed Tesla’s receipt of over $500 million in GPUs, impacting the development of its self-driving cars and humanoid robots.This move by Musk has upset some Tesla shareholders who question his commitment to the company as he juggles his many ventures. Tesla’s stock price is already down due to slowing sales and increased competition. Musk, meanwhile, is promoting future products like self-driving software and robotaxis that haven’t materialized yet.Nvidia, struggling to meet high demand for its GPUs, is a supplier to both Tesla and xAI, which is building its own massive GPU cluster in North Dakota. Musk reportedly wants xAI to have access to all 100,000 chips by year-end.While Tesla has disclosed its Dojo supercomputer project in Buffalo and a supercomputer cluster planned for its Texas factory, xAI’s data center ambitions haven’t been officially revealed. xAI recently closed a $6 billion funding round with investors who also backed Musk’s Twitter acquisition.Adding to the conflict, Musk expressed discomfort with Tesla becoming an AI leader without more voting control (currently at 20.5%). He stated a preference to build AI products outside of Tesla if he can’t reach his desired ownership. This has angered some Tesla shareholders who see it as a threat.Legal experts point out that Musk prioritizing his private companies for critical hardware raises conflict-of-interest concerns. As CEO of multiple competing companies, he has a fiduciary duty to act in their best interests, which may not always align.This isn’t the first instance of Musk intermingling resources. He transferred Tesla employees to work on Twitter after its acquisition, and some work for both companies simultaneously. He’s also attracted former Tesla employees with expertise in AI and big data to xAI.A former Tesla employee believes Musk sees his companies as extensions of himself and feels entitled to manage them as he sees fit. However, diverting crucial resources from Tesla to X, especially considering the chip shortage, is seen as an extreme decision that could significantly delay Tesla’s AI advancements.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/04/elon-musk-told-nvidia-to-ship-ai-chips-reserved-for-tesla-to-x-xai.html
