Elon Musk Prioritizes X Over Tesla in AI Chip Allocation, Sparking Shareholder Concerns

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Elon Musk, the dynamic CEO known for his leadership in multiple high-profile companies, is facing scrutiny over his decision to prioritize AI chip allocation for his social media company, X, formerly known as Twitter, over Tesla. This move has sparked concerns among Tesla shareholders and raised questions about Musk’s commitment to the electric vehicle giant.

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The AI Chip Allocation Controversy

Emails from Nvidia senior staff, revealed by CNBC, indicate that Musk redirected a significant shipment of Nvidia’s flagship AI chips, the H100 GPUs, from Tesla to X. Originally reserved for Tesla, these chips are crucial for developing the supercomputers needed to advance Tesla’s autonomous vehicles and robotics. The reallocation has delayed Tesla’s receipt of over $500 million worth of GPUs, potentially pushing back critical developments.

Shareholder Concerns

This decision has not sat well with some Tesla shareholders, who are questioning whether Musk is fulfilling his obligations to Tesla while managing a portfolio of other companies, including SpaceX, Neuralink, and The Boring Company. Critics argue that Musk’s attention is divided and that Tesla is suffering as a result. Tesla’s stock has dropped 29% this year, partly due to an aging lineup of electric vehicles and increased competition.

Implications for Tesla

Musk’s move to prioritize X’s AI chip needs over Tesla’s has significant implications. It could delay the development of Tesla’s AI software aimed at creating fully autonomous vehicles and robotaxis. Additionally, ongoing layoffs at Tesla further complicate the company’s ability to meet its ambitious AI goals.

Musk’s Broader AI Ambitions

Despite these challenges, Musk continues to push for Tesla to become a leader in AI and robotics. He has announced plans to increase Tesla’s active H100 GPUs from 35,000 to 85,000 by the end of the year and to spend $10 billion on combined AI training and inference. However, the reallocation of resources to X and Musk’s other ventures raises doubts about whether these goals are achievable.

A Conflict of Interests

Musk’s overlapping responsibilities and resource allocations across his companies highlight potential conflicts of interest. Legal experts argue that in such situations, decisions should ideally be made by other executives without conflicting interests. However, Musk has historically taken a hands-on approach, often blending resources and personnel across his ventures.


Elon Musk’s decision to prioritize AI chip allocation for X over Tesla has ignited concerns among shareholders and underscores the complexities of managing multiple high-stakes companies. As Tesla navigates these challenges, the company’s ability to maintain its leadership in AI and autonomous technology remains uncertain.

For the latest updates on Elon Musk’s ventures and their impact on the tech industry, stay tuned.

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