Elon Musk diverted AI chips for Tesla to his companies X and xAI, according to CNBC

Elon Musk would have diverted processors for artificial intelligence (AI) applications manufactured by Nvidia and destined for Tesla to two of his companies, X and xAI, according to the US television network CNBC.

CNBC assured that it had access to emails from Nvidia, the main producer of chips for AI applications in the world, which indicate that Musk, CEO of the electric car manufacturer, “exaggerated”Tesla’s plans to acquire advanced processors.

Unlike Tesla, which is a publicly traded company, X and xAI are personally owned by Musk.

In April, Musk assured Tesla investors that by the end of the year he would acquire tens of thousands of advanced processors from Nvidia, called H100, and that the electric vehicle maker would invest $10 billion in AI development.

One of the Nvidia emails reached by CNBC, dated December 2023, states that Musk “is prioritizing installing H100 GPU in X instead of Tesla”, by redirecting the 12,000 H100 GPUs initially intended for Tesla in December to the social network.

“In exchange, X’s original orders of 12,000 H100s for January and June will be redirected to Tesla”the memo added.

In April, other emails from Nvidia indicate that Musk’s decisions may negatively impact Tesla’s plans.

Tesla shares opened lower this Tuesday after the publication of the CNBC information.

Musk faces a decisive vote on June 13 by Tesla shareholders who have to decide whether to approve his controversial payment in company stock options worth about $50 billion.

The payment, the result of a 2018 agreement between Musk and Tesla’s board of directors, was annulled in January of this year by a US judge, who determined that it was excessive and had been approved without shareholders having adequate information.

Looking ahead to the June 13 vote, at least two large US advisory companies have recommended that shareholders oppose the payment of compensation, considered one of the highest in the country’s history.