Tesla’s (NASDAQ:TSLA) Founder and CEO Elon Musk diverted a large AI chips shipment from Nvidia that had been reserved for Tesla to his social media company X, formerly known as Twitter, according to a CNBC report.
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Musk Diverted Nvidia Processors to X from Tesla
The diverting of AI chips from Tesla to X is pretty ironic. This is because Elon Musk had harbored the ambition of growing Tesla into a “leader in AI & robotics.” In order to achieve this, Musk stated in a post on X, following the company’s Q1 results, that Tesla would spend $10 billion this year “in combined training and inference AI.” However, it now appears that the processors brought from Nividia (NASDAQ:NVDA), initially sourced for Tesla and its initiative to build up its AI infrastructure, never reached the EV giant.
The CNBC report alleges that Musk’s rerouting of $500 million worth of graphics processing units (GPUs) from Tesla to X has delayed Tesla’s program of setting up supercomputers. These supercomputers were to be used to produce autonomous vehicles and humanoid robots.
Why Does X Require NVDA’s GPUs?
Musk’s AI startup, xAI, is closely connected with X. According to CNBC, xAI “uses some capacity in X data centers to run some of its training and inference for the large language models behind its chatbot, called Grok.” Nvidia’s GPUs diverted from Tesla could have been used to expand the AI architecture for Grok.
Musk has often pitched Grok as an alternative to OpenAI’s ChatGPT and termed it as a chatbot with “a rebellious streak.”
Is Tesla a Buy, Sell, or Hold?
Tesla has a consensus rating of Hold, which is based on nine Buys, 14 holds, and nine Sells. Over the past year, TSLA has declined by more than 15%, and the average TSLA price target of $174.60 implies a downside potential of 0.4% from current levels.
