Tesla CEO Elon Musk has instructed Nvidia to prioritize AI processor shipments to his companies X and xAI over Tesla.
As per CNBC report, this move raises concerns among Tesla shareholders about Musk's commitment to the electric vehicle (EV) maker as he manages multiple ventures.
An internal Nvidia memo from December revealed that Musk redirected 12,000 H100 GPUs, initially meant for Tesla, to X instead.
This decision delays Tesla's receipt of over $500 million in processors by several months. In return, X's original orders for January and June will be sent to Tesla.
In a post on X, Musk explained that Tesla currently lacks storage and activation capacity for the Nvidia processors, but a planned expansion of its Gigafactory in Texas will soon accommodate "50,000 H100s for Full Self-Driving (FSD) training."
Earlier this year, Musk announced that Tesla would increase its deployment of Nvidia’s advanced chips, spending $10 billion on AI to advance FSD software and robotics.
However, Musk is also focusing on AI development at X and xAI, including chatbot Grok. xAI, launched by Musk in 2023 to compete with OpenAI, recently raised $6 billion in funding.
However, Tesla did not respond to requests for comment, and Nvidia declined to comment.
Furthermore, Tesla shareholders will vote on June 13 on a proposed pay package for Musk, considered the largest for a CEO in corporate America.
