'Tesla Had No Place To Send The Nvidia Chips,' Says Elon Musk After Report Suggests He Diverted Thousands Of AI Chips Reserved For EV Giant To X And xAI: 'They Would Have Just Sat In A Warehouse'

Tesla Inc. TSLA CEO Elon Musk made headlines on Tuesday when a report surfaced about him redirecting thousands of Nvidia Corporation NVDA chips, initially reserved for the EV giant to X, formerly Twitter, and xAI. The tech billionaire has responded with an explanation for his decision.

What Happened: Musk took to X, and responded to the report, saying Tesla had no facilities to activate the Nvidia chips, so they would have ended up sitting idle in a warehouse.

He went on to say that the south extension of Giga Texas, which will house 50,000 H100s for Full Self-Driving or FSD training, is almost complete.

See Also: Elon Musk Mocks Steve Jobs, Apple’s Potential Deal With OpenAI, Siri’s AI Overhaul And More: This Week In Appleverse

The news broke after internal emails from Nvidia staff indicated that Musk had ordered the redirection of 12,000 H100 GPUs, initially allocated for Tesla, to X. This reportedly delayed Tesla’s receipt of over $500 million in GPUs.

Musk had previously expressed his intention to increase Tesla’s Nvidia H100 chips from 35,000 to 85,000 by the end of the year. However, the report stated that this decision could impact Tesla’s autonomous vehicles and robotics development.

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Why It Matters: This latest revelation comes after earlier this week, Musk hinted that xAI’s next significant step would be investing in Nvidia’s AI chips, the Blackwell B200s.

At the time, the tech billionaire also said that investing in building current technology like Nvidia's H100s may not be wise given the pace of technology improvement. “Given the pace of technology improvement, it’s not worth sinking 1GW of power into H100s.”

Last month, Musk also acknowledged Jensen Huang’s praise of Tesla’s leadership in autonomous vehicles, after the Nvidia CEO said, “Tesla is far ahead in self-driving cars.”

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.