Elon Musk Sets Back Tesla By Billions Of Dollars In Time Value Of Autonomy-Related Efforts By Diverting Chips To X And xAI
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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:
Related Story Elon Musk Pledges To Spend Around $9 Billion To Acquire 300,000 Units Of NVIDIA’s B200 Chips For xAI By “Next Summer”
The memo goes on to add:
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
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