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Elon Musk is banking on the robotaxi to save Tesla from its current woes, which are characterized by an anemic demand environment and aggravated by the EV giant's margin-eviscerating price cuts. Yet, in a development that axes Tesla's entire autonomy-related narrative, Elon Musk has apparently diverted thousands of NVIDIA's AI chips to X and xAI, costing Tesla billions of dollars in time value of autonomy-related efforts.
As per the reporting by CNBC, Elon Musk diverted a "sizable shipment" of NVIDIA's GPUs, worth around $500 million, away from Tesla and toward his own artificial intelligence-focused enterprise, xAI, as well as his social media platform, X. A December memo from NVIDIA notes:
“Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead.”
The memo goes on to add:
“In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”
And honestly, given the value of Tesla that is ascribed to its "AI efforts," you could argue that the time value of the theft is worth tens of billions of dollars
— ESG Hound (@ESGhound) June 4, 2024
In doing so, Musk likely cost Tesla billions of dollars in time value of autonomy-related efforts. For the benefit of those who might not be aware, during Tesla's Q1 2024 earnings call, Elon Musk announced that Tesla's stash of H100 GPUs will increase from 35,000 units to 85,000 units by the end of the year. Subsequently, Musk noted in a dedicated X post that Tesla would "spend around $10B this year in combined training and inference AI, the latter being primarily in car."
For additional context, do note that Elon Musk has threatened to walk away from Tesla should his multi-billion-dollar compensation package fail to win shareholder approval. His previous package was voided by the Delaware Court of Chancery for being a product of "sham negotiations" with a beholden board.
Against this backdrop, Elon Musk appears to be focusing his efforts on X and xAI at the apparent expense of Tesla. We reported earlier this week that xAI is about to spend a whopping $9 billion on acquiring around 300,000 units of NVIDIA's B200 GPU, assuming a $30,000 price point for each unit.
Dojo is MIA and yet Elon is shifting GPU orders between his companies (totally not a conflict of interest) to paint a rosier quarter for $TSLA, while claiming he's all-in on FSD. Typical Elon tactic. $TSLAQ #Teslanos #ElonQ https://t.co/KxdJkWhuCi pic.twitter.com/2d1gUYwHHP
— Yolo𝕏ing of $TSLAQ (Supervised) (@yoloption) June 4, 2024
At a time when Tesla's board is already under fire for apparently neglecting its fiduciary duties, today's reporting will only add to the perception of corporate misgovernance at Tesla.
Hey Adam Jonas and @MorganStanley... do you still think $TSLA's "Dojo supercomputer" (the name of which does not appear in any $TSLA 10-K or 10-Q) is worth $600bn, as you published late last yr? It seems, Musk is diverting $NVDA GPUs to X, from $TSLA. Thoughts? pic.twitter.com/pTQ1xwXGEF
— Gordon Johnson (@GordonJohnson19) June 4, 2024
Additionally, this development also downgrades Tesla's autonomy-related efforts, especially as the company's Form 10-K and 10-Q make no mention of its bespoke Dojo supercomputer, one that Morgan Stanley values at a whopping $600 billion.
Update: Elon Musk Denies And Then Confirms This Scoop
Laura “Liar” Kolodny
— Elon Musk (@elonmusk) June 4, 2024
Initially, Elon Musk called out the CNBC journalist who broke this story, terming her a "liar."
Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse.
The south extension of Giga Texas is almost complete. This will house 50k H100s for FSD training.
— Elon Musk (@elonmusk) June 4, 2024
Few hours later, the CEO of Tesla essentially confirmed this story, arguing that he diverted the chips due to insufficient utilization capacity at Giga Texas.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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