Musk Clarifies Nvidia AI Chip Allocation for Tesla

Elon Musk Disputes Chip Allocation Report, Clarifies AI Plans.

Tesla CEO Elon Musk has fired back against a CNBC report alleging he diverted artificial intelligence (AI) chips from Tesla to his social media company, X (formerly Twitter).

On June 4th, CNBC published an article claiming emails revealed Musk requested Nvidia, a leading manufacturer of graphics processing units (GPUs) used for AI, to prioritize chip shipments for X over Tesla. The article alleged Musk diverted 12,000 Nvidia H100 chips originally intended for Tesla’s operations.

Taking to social media, Musk vehemently denied these claims. He clarified that Tesla simply didn’t require the chips at this specific time. Having them sit idle in storage wouldn’t benefit Tesla.

Further refuting the report, Musk mentioned the nearing completion of the south extension at the Giga Texas factory. This expansion, according to him, will house 50,000 H100 chips specifically dedicated to Tesla’s Full Self-Driving (FSD) training program. He even went on to label the CNBC article’s author a “liar” in a separate social media post.

Market Reaction and Investor Concerns

The CNBC report triggered a temporary dip in Tesla’s share price, dropping 1% in early trading on June 4th. CNBC also suggested the allegations worsened existing tensions between Musk and some Tesla investors. These investors worry about potential conflicts of interest arising from Musk’s leadership of multiple companies, including Tesla, SpaceX, Neuralink, xAI, and X.

Musk is a prominent figure in the AI and brain-computer interface (BCI) space. Companies like X and Neuralink compete directly with established players like OpenAI and Google.

X launched the Grok chatbot in 2023, positioning it as a “non-woke” alternative to OpenAI’s ChatGPT. This large language model chatbot is now accessible to all X’s paid subscribers.

Neuralink also received a crucial green light from the U.S. Food and Drug Administration (FDA) for human trials. In February 2024, they successfully implanted the first human subject with their BCI technology. Musk claims this individual could control a computer mouse directly using the interface, solely through their thoughts.