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Elon Musk, chief executive officer of SpaceX and Tesla and owner of X, speaks at the Milken Conference 2024 in Beverly Hills, California, May 6, 2024.

David Swanson | Reuters

Elon Musk says he can grow Tesla into “a leader in AI & robotics,” an ambition that he’s said will require a lot of pricey processors from Nvidia to build up its infrastructure.

On Tesla’s first-quarter earnings call in April, Musk said the electric vehicle company will increase the number of active H100s — Nvidia’s flagship artificial intelligence chip — from 35,000 to 85,000 by the end of this year. He also wrote in a post on X a few days later that Tesla would spend $10 billion this year “in combined training and inference AI.”

But emails written by Nvidia senior staff and widely shared inside the company suggest that Musk presented an exaggerated picture of Tesla’s procurement to shareholders. Correspondence from Nvidia staffers also indicates that Musk diverted a sizable shipment of AI processors that had been reserved for Tesla to his social media company X, formerly known as Twitter.

Tesla shares slipped as much as 1% on the news Tuesday morning.

By ordering Nvidia to let privately held X jump the line ahead of Tesla, Musk pushed back the automaker’s receipt of more than $500 million in graphics processing units, or GPUs, by months, likely adding to delays in setting up the supercomputers Tesla says it needs to develop autonomous vehicles and humanoid robots.

“Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead,” an Nvidia memo from December said. “In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”

A more recent Nvidia email, from late April, said Musk’s comment on the first-quarter Tesla call “conflicts with bookings” and that his April post on X about $10 billion in AI spending also “conflicts with bookings and FY 2025 forecasts.” The email referenced news about Tesla’s ongoing, drastic layoffs and warned that head-count reductions could cause further delays with an “H100 project” at Tesla’s Texas Gigafactory.

The new information from the emails, read by CNBC, highlights an escalating conflict between Musk and some agitated Tesla shareholders who question whether the billionaire CEO is fulfilling his obligations to Tesla while also running a collection of other companies that require his attention, resources and hefty amounts of capital.

A spokesperson for Nvidia declined to comment for this story. Musk and representatives for X and Tesla did not respond to requests for comment.

Critics have said Musk is only a part-time CEO of Tesla, the company responsible for the vast majority of his wealth. Musk is also the CEO of aerospace company SpaceX, the founder of brain-computer interface startup Neuralink and tunneling venture The Boring Co. He also owns X, which he acquired for $44 billion in late 2022, when it was still called Twitter. He launched his AI startup, xAI, in 2023.

X and xAI are tightly intertwined. In a post on X in November, Musk wrote, “X Corp investors will own 25% of xAI.” Additionally, xAI uses some capacity in X data centers to run some of its training and inference for the large language models behind its chatbot Grok, CNBC has learned.

Musk has pitched Grok, originally named Truth GPT, as a politically incorrect chatbot with “a rebellious streak” and a would-be competitor to OpenAI’s ChatGPT and other generative AI services.

While Musk juggles his many ventures, Tesla shareholders have reason for concern. The company is in the midst of a troubling sales decline due in part to its aging lineup of electric vehicles and increased competition. Its reputation has also suffered in the U.S., according to the Axios Harris Poll 100 survey, which attributed some of the slippage to Musk’s “antics” and “political rants.”

Tesla’s stock price is down 29% this year.

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Rather than discuss EV sales or the massive restructuring underway at Tesla, Musk has been encouraging investors to focus on future products that he’s been promising for years but has yet to deliver. That includes AI software to turn existing cars into self-driving vehicles, dedicated robotaxis that can make money for their owners, and a driverless transportation network.

“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” Musk said on the April earnings call. “We will, and we are.”

To get there, he’s said, Tesla requires plenty of Nvidia’s GPUs which are specialized for AI training and workloads. Those chips are in limited supply due to soaring demand from Google, Amazon, Meta, Microsoft, OpenAI and others.

‘Consuming every GPU that’s out there’

Nvidia, now the third-most-valuable company in the world with a $2.8 trillion market cap, has said it’s hard to keep up with demand. Between the cloud service providers and the companies developing AI models, customers “are consuming every GPU that’s out there,” Nvidia CEO Jensen Huang said on an earnings call in May, after the chipmaker reported its third straight quarter of more than 200% revenue growth.

Huang also said, on an earnings call in February, that Nvidia does its best to “allocate fairly and to avoid allocating unnecessarily,” adding “why allocate something when the data center’s not ready?”

In naming customers that are already using Nvidia’s next-generation Blackwell platform, Huang mentioned xAI on the May call alongside six of the biggest tech companies on the planet as well as Tesla.

Jensen Huang, co-founder and chief executive officer of Nvidia Corp., speaks during the Nvidia GPU Technology Conference in San Jose, California, March 19, 2024.

David Paul Morris | Bloomberg | Getty Images

Musk likes to tout his infrastructure spending at both companies.

At Tesla, Musk has promised to build a $500 million “Dojo” supercomputer in Buffalo, New York, and a “super dense, water-cooled supercomputer cluster” at the company’s factory in Austin, Texas. The technology would potentially help Tesla develop the computer vision and LLMs needed for robots and autonomous vehicles.

At xAI, which is racing to compete with OpenAI, Anthropic, Google and others in developing generative AI products, Musk is also seeking to build “the world’s largest GPU cluster” in North Dakota, with some capacity online in June, according to an internal Nvidia email from February.

The memo described a “Musk mandate” to make all 100,000 chips available to xAI by the end of 2024. It noted that the LLM behind xAI’s Grok was relying on Amazon and Oracle cloud infrastructure, with X providing additional data center capacity.

The Information previously reported some details of xAI’s data center ambitions.

On May 26, xAI said it closed a $6 billion financing round led by many of the same investors who funded Musk’s Twitter takeover. The company was incorporated in March 2023, but Tesla didn’t disclose its formation at the time, and it was four months later before Musk publicly introduced the startup.

Conflicts of interest

While Musk has said for years that Tesla is a leader in AI, he wrote in a post on X in January that he’d want more control over the company before pushing further in that direction.

“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned,” he said in the post.

Tesla’s latest proxy filing indicates Musk has 20.5% of the company’s outstanding shares, a figure that includes options awarded to Musk as part of his unprecedented 2018 CEO pay package. A Delaware court has ordered that compensation to be rescinded. Post-trial proceedings are ongoing and subject to appeal.

If he is unable to reach his desired ownership mark, Musk said in the January post, he “would prefer to build products outside of Tesla.” He’s already doing that at xAI.

Musk’s comments in the January post rankled some longstanding bulls, including the company’s largest retail shareholder, Leo Koguan, and Gerber Kawasaki’s Ross Gerber, who characterized his demand as “blackmail.”

Joel Fleming, a securities litigator at Equity Litigation Group, said that by letting his private companies skip ahead of Tesla in procuring critical hardware, Musk is making his conflicts of interest readily apparent.

“When you have someone like Mr. Musk who is a fiduciary to multiple companies, the law recognizes this creates conflict,” Fleming said. “If you owe fiduciary duties to two or more companies that are competing over the same things, you may end up channeling corporate opportunity away from one company to another.”

Fleming, who frequently represents public company investors in shareholder disputes, said that in such situations, other executives would be in the best position to make decisions, while those who are conflicted should abstain.

“That has not historically been the path that Mr. Musk has chosen for himself,” Fleming said.

Musk hasn’t been shy about intermingling corporate resources among his companies.

For example, following his buyout of Twitter, Musk enlisted dozens of Autopilot software engineers and other technical and administrative employees from Tesla to help him make sweeping changes at the company. Some employees even work for two Musk companies at once.

At xAI, Musk has also attracted employees away from Tesla, including machine-learning scientist Ethan Knight, and at least four other former Tesla employees who had been involved in Autopilot and big data projects there before joining the startup.

A former Tesla supply chain analyst, who asked not to be named in order to discuss sensitive matters, told CNBC that Musk has always considered his companies as an extension of his persona and believed he can do whatever he wants with them. That includes Tesla’s 2016 acquisition of SolarCity, where he was chairman and a top shareholder.

However, the person said, redirecting a large shipment of chips from Tesla to X is extreme, given the scarcity of Nvidia’s technology. The decision means the automaker willingly gave up precious time that could have been used to build out its supercomputer cluster in Texas or New York and advance the models behind its self-driving software and robotics.

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Amazon Kuiper second satellite launch postponed by ULA due to rocket booster issue

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Amazon Kuiper second satellite launch postponed by ULA due to rocket booster issue

A United Launch Alliance Atlas V rocket is shown on its launch pad carrying Amazon’s Project Kuiper internet network satellites as the vehicle is prepared for launch at the Cape Canaveral Space Force Station in Cape Canaveral, Florida, U.S., April 28, 2025.

Steve Nesius | Reuters

United Launch Alliance on Monday was forced to delay the second flight carrying a batch of Amazon‘s Project Kuiper internet satellites because of a problem with the rocket booster.

With roughly 30 minutes left in the countdown, ULA announced it was scrubbing the launch due to an issue with “an elevated purge temperature” within its Atlas V rocket’s booster engine. The company said it will provide a new launch date at a later point.

“Possible issue with a GN2 purge line that cannot be resolved inside the count,” ULA CEO Tory Bruno said in a post on Bluesky. “We will need to stand down for today. We’ll sort it and be back.”

The launch from Florida’s Space Coast had been set for last Friday, but was rescheduled to Monday at 1:25 p.m. ET due to inclement weather.

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Amazon in April successfully sent up 27 Kuiper internet satellites into low Earth orbit, a region of space that’s within 1,200 miles of the Earth’s surface. The second voyage will send “another 27 satellites into orbit, bringing our total constellation size to 54 satellites,” Amazon said in a blog post.

Kuiper is the latest entrant in the burgeoning satellite internet industry, which aims to beam high-speed internet to the ground from orbit. The industry is currently dominated by Elon Musk’s Space X, which operates Starlink. Other competitors include SoftBank-backed OneWeb and Viasat.

Amazon is targeting a constellation of more than 3,000 satellites. The company has to meet a Federal Communications Commission deadline to launch half of its total constellation, or 1,618 satellites, by July 2026.

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Google issues apology, incident report for hourslong cloud outage

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Google issues apology, incident report for hourslong cloud outage

Thomas Kurian, CEO of Google Cloud, speaks at a cloud computing conference held by the company in 2019.

Michael Short | Bloomberg | Getty Images

Google apologized for a major outage that the company said was caused by multiple layers of flawed recent updates.

The company released an incident report late on Friday that explained hours of downtime on Thursday. More than 70 Google cloud services stopped working properly across the globe, knocking down or disrupting dozens of third-party services, including Cloudflare, OpenAI and Shopify. Gmail, Google Calendar, Google Drive, Google Meet and other first-party products also malfunctioned.

“We deeply apologize for the impact this outage has had,” Google wrote in the incident report. “Google Cloud customers and their users trust their businesses to Google, and we will do better. We apologize for the impact this has had not only on our customers’ businesses and their users but also on the trust of our systems. We are committed to making improvements to help avoid outages like this moving forward.”

Thomas Kurian, CEO of Google’s cloud unit, also posted about the outage in an X post on Thursday, saying “we regret the disruption this caused our customers.”

Google in May added a new feature to its “quota policy checks” for evaluating automated incoming requests, but the new feature wasn’t immediately tested in real-world situations, the company wrote in the incident report. As a result, the company’s systems didn’t know how to properly handle data from the new feature, which included blank entries. Those blank entries were then sent out to all Google Cloud data center regions, which prompted the crashes, the company wrote.

Engineers figured out the issue in 10 minutes, according to the company. However, the entire incident went on for seven hours after that, with the crash leading to an overload in some larger regions.

As it released the feature, Google did not use feature flags, an increasingly common industry practice that allows for slow implementation to minimize impact if problems occur. Feature flags would have caught the issue before the feature became widely available, Google said.

Going forward, Google will change its architecture so if one system fails, it can still operate without crashing, the company said. Google said it will also audit all systems and improve its communications “both automated and human, so our customers get the information they need asap to react to issues.” 

— CNBC’s Jordan Novet contributed to this report.

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AMD shares rise 9% after analysts say they expect a ‘snapback’ for chipmaker

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AMD shares rise 9% after analysts say they expect a 'snapback' for chipmaker

AMD CEO Lisa Su unveils the AMD vision for Advancing Al.

Courtesy: AMD

Shares of Advanced Micro Devices rose nearly 9% on Monday after analysts at Piper Sandler lifted their price target on the stock on optimism about the chipmaker’s latest product announcement.

The analysts said they see a snapback for AMD’s graphics processing units, or GPUs, in the fourth quarter. That’s when they expect the chipmaker to be through the bulk of the $800 million in charges that AMD said it would incur as a result of a new U.S. license requirement that applies to exports of semiconductors to China and other countries. 

Last week, AMD revealed its next-generation artificial intelligence chips, the Instinct MI400 series. Notably, the company unveiled a full-server rack called Helios that enables thousands of the chips to be tied together. That chip system is expected to be important for AI customers such as cloud companies and developers of large language models. 

AMD CEO Lisa Su showed the products on stage at an event in San Jose, California, alongside OpenAI CEO Sam Altman, who said they sounded “totally crazy.”

“Overall, we are enthused with the product launches at the AMD event this week, specifically the Helios rack, which we think is pivotal for AMD Instinct growth,” the analysts wrote in their note. 

Piper Sandler raised its price target for AMD’s share price from $125 to $140.

The stock jumped past $126 on Monday to close at its highest level since Jan. 7, before President Donald Trump announced sweeping new tariffs and AMD warned of the chip control charges.

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