June 4, 2024
Elon Musk Diverts Tesla AI Chips to X
AI

Elon Musk Diverts Tesla AI Chips to X

Elon Musk reportedly redirected many resources for AI chips away from Tesla and towards his social media company, X, and its AI subsidiary, xAI. This decision, revealed in emails obtained by CNBC, has sparked concerns about potential delays in Tesla’s plans for developing its AI and robotics capabilities.

Tesla previously announced its intention to become a leader in the field of AI and robotics. This ambition was reflected in its plans to significantly increase its acquisition of Nvidia’s H100 AI chips, from 35,000 to 85,000 units by the end of the year. Musk further emphasized this commitment in a post on X, where he pledged a $10 billion investment in AI training and inference, primarily focused on self-driving car technology.

However, internal emails at Nvidia paint a different picture. Instead of prioritizing Tesla as publicly stated, Musk reportedly diverted a portion of the planned chip purchases. A December memo from Nvidia revealed that 12,000 H100 GPUs originally intended for Tesla were redirected to X, with an agreement to fulfill X’s original orders later. This action raises questions about the accuracy of Musk’s public pronouncements on Tesla’s AI investments.

Potential Impact on Tesla’s Self-Driving Ambitions

This decision by Musk could have significant implications for Tesla investors who are counting on his promise of fully autonomous vehicles. The company’s planned unveiling of its first robotaxi in August hinges heavily on its AI development progress. Furthermore, Tesla’s current driver-assistance features, Autopilot, and Full Self-Driving, have faced criticism due to their involvement in hundreds of crashes, including fatalities. Delays in acquiring the necessary AI hardware could further hinder Tesla’s progress in achieving true autonomous driving.

X’s AI Race and Nvidia’s Booming Business

Meanwhile, Musk’s AI startup, xAI, is engaged in fierce competition with OpenAI, Google, and others in the race to develop practical applications for generative AI and large language models. xAI recently secured a $6 billion funding round based on its promise of creating advanced AI products and the infrastructure to support them.

Nvidia, a major supplier of GPUs that power the AI ambitions of numerous companies, has seen its stock surge to become the third most valuable company globally. The demand for these AI chips is driven by factors like cloud computing and generative AI. According to a May earnings call reported by CNBC, CEO Jensen Huang stated that “customers are consuming every GPU that’s out there.” Nvidia’s recent quarter boasted a remarkable 200% revenue growth.

Image by ElasticComputeFarm from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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