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Home News

Did Elon Musk Sabotage Tesla’s Self-Driving Cars for His New Social Media Company?

by Joan Aimuengheuwa
June 4, 2024
in News
0
Did Elon Musk Sabotage Tesla's Self-Driving Cars for His New Social Media Company?
Elon Musk

Elon Musk

UBA
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Elon Musk redirected a shipment of Nvidia AI chips meant for Tesla to his social media company, X (formerly Twitter), according to internal Nvidia emails obtained by CNBC. 

Tesla aimed to purchase 85,000 Nvidia H100 AI chips this year to fuel its development of self-driving cars and robotics. However, emails show Elon Musk diverted 12,000 chips to X, prioritizing its AI subsidiary, xAI.

This decision could slow Tesla’s AI development, impacting the construction of supercomputer clusters needed to train complex AI models for autonomous vehicles and robots.

The emails also disclose a discrepancy between Musk’s public pronouncements and Tesla’s actual chip purchases. Nvidia staff noted inconsistencies between Musk’s comments on AI spending and Tesla’s bookings and forecasts. 

This puts forward issues about Tesla’s true commitment to AI, especially considering ongoing layoffs that could further delay its “H100 project.”

This is happening in the midst of declining Tesla stock prices due to falling electric vehicle sales and an aging product lineup. Musk’s behavior and social media presence have also tarnished Tesla’s reputation.

Against this backdrop, Tesla shareholders are understandably concerned about Elon Musk prioritizing his new venture, xAI, over Tesla’s core business. They point to his juggling act of leading multiple companies and his recruitment of Tesla employees for xAI as evidence of a potential conflict of interest.

Founded in 2023, xAI is rapidly building its AI infrastructure with a $6 billion funding round and plans for a massive GPU cluster in North Dakota. This aggressive expansion suggests xAI’s initiatives in the generative AI space, where companies compete to develop powerful large language models.

While legal on the surface, Musk’s actions raise ethical and potentially legal concerns. CEOs with divided loyalties have a fiduciary duty to act in the best interests of each company they lead. Diverting resources from Tesla to a private venture could be a breach of that duty.

Securities litigator Joel Fleming argues that Musk’s actions highlight his conflicts of interest. In such situations, decisions should be made by executives without conflicts. However, Elon Musk has a history of intermingling resources between his companies, raising questions about his approach to corporate governance.

The impact of Musk’s decision on Tesla’s AI development is still not certain. The delay in acquiring important AI chips could hinder progress on self-driving cars and robots. 

With intensifying competition in the electric vehicle market, any delay in Tesla’s autonomous driving technology could be particularly detrimental.

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  • Joan Aimuengheuwa
    Joan Aimuengheuwa

    Joan thrives at helping individuals and businesses scale via storytelling...

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Tags: Elon MuskNvidia AI chipsTESLAXxAI
Joan Aimuengheuwa

Joan Aimuengheuwa

Joan thrives at helping individuals and businesses scale via storytelling...

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