Elon Musk’s Bold Move: Redirecting Nvidia AI Chips to XAI68K

Key Points

  • Chip Reallocation: Elon Musk has redirected thousands of Nvidia AI chips from Tesla to his new ventures, X and XAI68K.
  • Tesla Impact: This decision delays Tesla’s AI projects, including autonomous vehicles and robotics.
  • XAI68K Priority: Musk’s focus is on positioning XAI68K as a leader in AI innovation.

Musk’s Vision for AI: XAI68K Takes the Lead

Elon Musk, renowned for his revolutionary innovations, is now intensifying his focus on AI and robotics with a strong emphasis on XAI68K. While Tesla remains a cornerstone of Musk’s portfolio, recent maneuvers indicate that XAI68K is pivotal to his vision for the future.

Expanding AI at Tesla

During Tesla’s Q1 earnings call, Musk outlined plans to significantly enhance the company’s AI capabilities by ramping up its Nvidia H100 chips from 35,000 to 85,000. These high-performance processors are crucial for Tesla’s autonomous vehicle and robotics initiatives, with an expected investment of $10 billion this year.

Redirecting Resources to XAI68K

Despite these plans, Musk has redirected a substantial shipment of AI processors originally designated for Tesla to his new ventures, X and XAI68K. This adjustment has delayed Tesla’s GPU deliveries by several months, affecting the timetable for developing its supercomputers.

A December Nvidia memo disclosed this strategic shift: “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.”

Implications for Tesla and XAI68K

The reallocation has sparked concerns among Tesla shareholders regarding potential setbacks in the company’s AI projects. However, Musk’s dedication to advancing XAI68K remains evident. Launched in 2023, XAI68K aims to integrate state-of-the-art AI technologies, leveraging Nvidia’s powerful H100 GPUs to push the boundaries of AI innovation.

XAI68K’s Key Focus Areas:

  • Advanced AI Algorithms: Developing sophisticated AI models for sectors like autonomous driving and robotics.
  • Data Center Integration: Harnessing X data centers’ capacity for AI training and inference tasks.
  • Grok AI Chatbot: Introducing Grok, a disruptive chatbot positioned as a competitor to OpenAI’s ChatGPT.

Balancing Multiple Ventures

Musk’s management of diverse ventures—Tesla, SpaceX, Neuralink, The Boring Company, and now XAI68K—raises concerns about his capacity to fulfill all commitments. Critics argue that his divided attention could impact Tesla, especially amidst heightened competition and declining sales.

Consuming Every Available GPU

Nvidia, now the world’s third-most valuable company, is grappling with soaring demand for its processors. CEO Jensen Huang remarked that customers are “consuming every GPU that’s out there.” During a recent briefing, Huang highlighted XAI68K as an early adopter of Nvidia’s next-generation Blackwell platform.

Musk’s Infrastructure Investments

Elon Musk has announced substantial infrastructure investments, including a $500 million “Dojo” supercomputer for Tesla and a densely packed cluster at the Austin factory. These initiatives support Tesla’s advancements in AI for autonomous vehicles and robots. At XAI68K, Musk aims to compete with leading AI firms by making 100,000 GPUs available to the startup by the end of 2024.

The Financial Push for XAI68K

On May 26, XAI68K secured $6 billion in financing, spearheaded by investors who supported Musk’s Twitter acquisition. Despite its newcomer status, XAI68K is rapidly gaining momentum, underscoring Musk’s strategic pivot towards AI.

Conflicts of Interest and Strategic Priorities

Musk’s decision to prioritize XAI68K over Tesla in GPU allocation has drawn criticism from some shareholders, citing potential conflicts of interest due to his involvement in multiple companies.

Integration of Corporate Resources

Musk’s proclivity for pooling resources across his ventures is well-documented. After acquiring Twitter, he enlisted Tesla engineers to aid the platform. Similarly, XAI68K has attracted former Tesla employees, including machine-learning scientist Ethan Knight.

Musk defended his GPU reallocation decision, asserting that Tesla had no immediate need for Nvidia chips and that they would otherwise have remained unused. He assured that Tesla’s facilities will soon host a substantial number of GPUs to advance self-driving technology.


Amidst managing multiple ventures, Musk’s strategic prioritization of XAI68K underscores his vision for the future of AI. While Tesla shareholders voice concerns, attention remains focused on how these decisions impact Tesla’s AI and robotics endeavors.

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