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Tesla is slated to spend the entire market capitalization of Rivian and Lucid Group, that too on a combined basis, on AI by the end of this year, as per a tabulation by Morgan Stanley's Adam Jonas. What's more, when one includes the roughly $10 billion in AI-related expenditure by xAI, it become patently evident that Elon Musk is banking on a prolific spending spree to capture a near-apex position in this emerging, century-shaping paradigm shift.
Morgan Stanley's Adam Jonas on Elon Musk's AI spending: "The Muskonomy is spending the market caps of RIVN and LCID combined, on Al, this year alone.
"Tesla intends to spend at least $10B on Al in 2024, on several compute projects: the supercluster in Austin, Texas (planned to… pic.twitter.com/REUsxvv4tU
— Sawyer Merritt (@SawyerMerritt) September 25, 2024
To wit, Adam Jonas has now penned a new investment note that tabulates the total AI-related spending from Elon Musk's entities that will materialize by the end of 2024.
Specifically, Jonas believes that Tesla will collectively spend a whopping $10 billion on AI projects in 2024, which includes a supercluster in Austin that will house ~50,000 units of NVIDIA's H100 GPU and around 20,000 units of Tesla's bespoke D1 chip, with the residual spending divided between Tesla's Dojo supercomputer and inference-focused computing.
In fact, Tesla's latest Form 10-Q filing already shows $2.6 billion in expenditure on "Computer Equipment, Hardware and Software PPE, $2.5b of Al Infrastructure PPE, and nearly $7bn of Construction in Progress (primarily relating to Al related assets), squaring with the $10b projection."
Adam Jonas goes on to note:
"Of the $10bn, Musk estimated spending $5b on internal development, $3-4bn on NVDA GPUs alone, and the rest on residual infrastructure."
Moreover, Elon Musk's AI-focused enterprise, xAI, is also slated to spend around $10 billion by the end of 2024, primarily in relation to its gigantic supercluster, dubbed Colossus.
As we noted in a previous post, the Colossus supercluster consists of 100,000 liquid-cooled H100 GPUs on a single RDMA fabric, and is currently being used to train the Grok 3 LLM, which is slated for an official launch in December.
Back in June, the CEO of Tesla had announced that xAI's "next big step would probably be ~300k B200s with CX8 networking next summer."
As a refresher, xAI had raised $6 billion back in May in a new funding round that valued Elon Musk's AI-focused enterprise at $18 billion. While the chatbot Grok is xAI's only product at the moment, the startup intends to significantly expand its product portfolio by ramping up its investments in GPU clusters.
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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