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Elon Musk Diverts Nvidia AI Chips from Tesla to X, Raising Shareholder Concerns

Elon Musk, CEO of Tesla, has stirred controversy by redirecting thousands of Nvidia-made AI chips meant for Tesla to his other ventures, X Corp. and xAI Corp. This move, reported by CNBC, has sparked concerns among Tesla shareholders regarding Musk’s focus on the electric vehicle (EV) maker as he manages multiple projects simultaneously.

According to internal communications from Nvidia, Musk instructed the diversion of about 12,000 H100 GPUs, originally designated for Tesla, to X instead. This decision could delay Tesla’s acquisition of over $500 million worth of processors by several months. In exchange, X’s initial orders for January and June will be redirected to Tesla, as per the disclosed memo.

Musk clarified the situation in a post on X, stating that Tesla lacked the capacity to store and activate the Nvidia processors at the moment. However, he highlighted a planned expansion of Tesla’s Gigafactory in Texas, which will accommodate approximately “50,000 H100s for Full Self-Driving (FSD) training.”

Earlier this year, Musk announced Tesla’s intention to ramp up its deployment of Nvidia’s advanced chips, allocating $10 billion towards AI to enhance FSD software and robotics.

Despite these developments, concerns linger regarding Musk’s allocation of resources across his various ventures. In addition to Tesla, Musk is actively involved in AI development at X and xAI, including the development of chatbot Grok. xAI, launched by Musk in 2023 to compete with OpenAI, recently secured a significant $6 billion funding round.

However, neither Tesla nor Nvidia has responded to requests for comment on the matter, leaving shareholders apprehensive about Tesla’s trajectory under Musk’s leadership.

Moreover, Tesla shareholders are poised to vote on June 13 on a proposed pay package for Musk, which is considered to be the largest for a CEO in corporate America.

In conclusion, Elon Musk’s decision to divert Nvidia AI chips from Tesla to X and xAI Corp. has raised concerns among shareholders about the company’s direction and Musk’s priorities. As Tesla navigates the competitive landscape of the EV market and strives to advance its autonomous driving technology, stakeholders are closely monitoring Musk’s actions and their implications for the company’s future.

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