Elon Musk confirms reallocating thousands of Nvidia AI chips from Tesla

By Mike Murphy

CEO estimates Tesla will buy $3 billion to $4 billion in Nvidia chips this year

Tesla Inc. Chief Executive Elon Musk confirmed Tuesday that he diverted thousands of Nvidia Corp. AI chips away from the EV maker.

Citing emails and memos from Nvidia (NVDA), CNBC had reported earlier in the day that Musk had redirected about 12,000 Nvidia H100 graphics processing units originally shipped to Tesla (TSLA) to two of his other companies, X and xAI.

In a post on X, formerly Twitter, Musk confirmed the reallocation of chips, saying "Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse."

Tesla is working on building supercomputers to develop its self-driving technology.

Musk said that Tesla's Giga Texas facility was nearly complete, and will eventually "house 50k H100s for FSD training." He added that his "current best guess" is that Tesla will buy $3 billion to $4 billion in Nvidia chips this year.

CNBC had reported that Musk exaggerated Tesla's procurement of chips, and that by reallocating the chips, Musk likely added months-long delays to setting up the supercomputers. That could rekindle criticism from shareholders that he's juggling too many companies and is not focused enough on Tesla.

Tesla shareholders are currently voting on Musk's $56 billion pay package, among other things, for the company's June 13 annual meeting.

Tesla shares slipped nearly 1% on Tuesday, and are down about 30% year to date. Nvidia stock gained 1.3% in Tuesday, and is up 135% in 2024.

-Mike Murphy

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06-04-24 2156ET

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