Hey everybody, welcome back to the Elon Musk Podcast.
This is a show where we discuss. The Critical.
Crossroads that shape SpaceX, Tesla X The Boring Company.
And Neuralink. I'm your host, Will.
Walden Tesla CEO Elon Musk has confirmed that the company plans
to spend between 3 billion and four billion on NVIDIA AI chips
this year. This revelation came on Tuesday
when Musk addressed the reallocation of NVIDIA H 100
Graphics Processing units GPUs originally intended for Tesla,
to his other ventures, X&XAI. According to CNBC, Musk diverted
approximately 12,000 NVIDIA H100 GPUs from Tesla to these other
companies. This shift was confirmed by Musk
in a post on X, where he stated that Tesla had no immediate use
for the chips which would have otherwise remained in storage.
The GPU's are integral to Tesla's ambitions in developing
its self driving technology. Tesla is constructing a
substantial supercomputing infrastructure to support this,
with the Giga, Texas facility nearing completion and slated to
house 50,000 H 100 GP US dedicated to full self driving
FSD training. Musk's actions have sparked
discussions among shareholders and analysts about the potential
delays this could cause for Tesla's supercomputing projects.
This reallocation might lead to months long delays in setting up
the necessary infrastructure, a critical component for advancing
Tesla's AI capabilities. The delays could add fuel to
ongoing criticism from Tesla shareholders, who are concerned
about Musk's attention being divided across multiple
companies. These concerns come at a time
when shareholders are voting on Musk's $56 billion compensation
package at the upcoming annual meeting.
The financial markets reacted to the news, with Tesla's shares
dipping nearly 1% on Tuesday, reflecting broader investor
concerns. Meanwhile, Nvidia's stocks saw a
1.3% increase, continuing its upward trajectory with 135% gain
year to date in 2024, driven by high demand for its GPUs.
Despite the reallocations, Musk remains optimistic about Tesla's
chip procurement, estimating significant investments in
NVIDIA hardware. He has stated that Teslas AI
related expenditures for the year will total around $10
billion, with about half dedicated to the company's
internally designed AI systems and the Dojo supercomputer.
The Giga Texas facilities development is a focal point for
Tesla's future. Musk highlighted that the
supercomputing center will initially require around 130
megawatts of power and cooling, with plans to expand to over 500
megawatts within 18 months. The facility's infrastructure
includes massive cooling systems, underground water lines
and four large water tanks. Must confirm these developments
in a recent post on X, describing the centre as a super
dense water cooled supercomputer cluster.
The facility is expected to play a crucial role in enhancing
Tesla's self driving technology and AI capabilities.
The diversion of GP US to X has potential implications for
Tesla's timeline in achieving its AI goals.
Musk's statement on X explained that Tesla's Austin factory is
not yet ready to utilize the NVIDIA chips, justifying the
temporary reallocation to prevent the chips from sitting
idle. This decision may raise
questions among Tesla investors about Musk's focus and
priorities, especially given the company's ambitious targets for
autonomous driving technology. Tesla is set to unveil its first
robot taxi vehicle in August. Tesla's self driving technology,
particularly its Autopilot and Full Self driving features, has
faced scrutiny following multiple crashes and fatalities.
These incidents have put additional pressure on the
company to demonstrate progress and reliability in its
autonomous systems. Meanwhile, Musk's AI startup XAI
is positioning itself as a competitor to giants like Open
AI and Google. Last month, XAI announced a $6
billion funding round aimed at advancing its AI capabilities
and developing new applications for generative AI.
NVIDIA, a critical supplier in the AI industry, has seen
substantial growth, driven by the demand for its GPUs.
CEO Jensen Huang highlighted during a recent earnings call
that the company's products are in high demand, contributing to
a 200% increase in revenue last quarter.
Nvidia's success is tied to its ability to supply essential
hardware for AI advancements across various industries.
The company has become the third most valuable in the world,
reflecting its pivotal role in powering AI research and
applications. Musk's confirmation of Tesla's
substantial investment in NVIDIA chips underscores the ongoing
collaboration between the two companies.
This partnership is expected to bolster Tesla's efforts in AI
and autonomous driving. Despite the temporary
reallocation of resources, the developments at Tesla's Giga
Texas facility and the integration of NVIDIA hardware
are crucial for the company's future AI endeavors.
Elon Musk's strategic decisions regarding NVIDIA chips are
indicative of his broader vision for AI across his various
enterprises. While the immediate reallocation
may pose challenges for Tesla, the long term prospects for AI
advancements remain strong, driven by significant
investments and ongoing developments in supercomputing
capabilities. Hey, thank you so much for
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