Musk Diverts Nvidia Chips from Telsa

Recently Elon Musk diverted a $500M in Nvidia GPU’s from Tesla to X.

CNBC: Musk has chips shipped to X

At first glance I thought this was about Musk’s Tesla pay package and previous threats to shareholders.

Give me 25% of Tesla or you don’t get AI and Robotics

Which seems incredibly likely looking at the headlines. But how could such a thing be legal or good business? If you look at the ordeal from the perspective of a shareholder in one or the other company, it seems like malfeasance. From the perspective of Tesla, shareholders have been told that self driving cars and robotaxis are the secret sauce that will propel Telsa forward into the future. Not getting those chips creates a situation where there is no way to achieve that objective in 2024. From the perspective of X, do they really have $500M to spend this year? Originally they were expected to take receipt of those chips in 2025, how can Musk move a $500M liability forward a calendar year so unilaterally?

The articles paint a slightly different picture though. If Musk is to be believed, the Tesla datacenter that would leverage these chips is not ready for receipt. And given all of Tesla’s layoffs this year plus declining sales; taking that $500M liability this year is probably not a good look.

It seems we’re looking at a situation where Musk is making good on a public threat; a situation in which Musk is trying to keep the 2024 Tesla balance sheet looking less bad to ’earn’ his $50B+ pay package; or Tesla is behind on the promised ‘robotaxi’ AI training. No wonder Tesla stock has dropped 29% this year.