Elon Musk ordered Nvidia to prioritize chips for X, xAI: CNBC

Tesla (TSLA) CEO Elon Musk reportedly ordered Nvidia (NVDA) to ship out and divert AI chips originally meant for Tesla to X and Musk's xAI startup, according to emails obtained by CNBC. The Morning Brief team reports on this.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video transcript

We have some breaking news this morning.

Elon Musk is reportedly ordering invidia to prioritise and ship thousands of a I chips meant for Tesla to X and Xa I.

That is, according to emails obtained by C NBC.

But we know from Tesla's first quarter earnings called Brad back in April, Elon Musk, saying that the EV company would increase the number of active H one hundreds.

That's invidia flagship A. I chip from 35,000 to 85,000 in number the end of the year.

But emails that C NBC obtained from within NVIDIA from among staffers shared within the company, suggesting that Elon Musk could have exaggerated that number.

That 85,000 number in terms of the number of chips to ship to Tesla in his statements to shareholders.

And now, of course, the big news that he could potentially be diverting those chips to X and Xa.

I mean, this is amazing.

And considering the fact that we to hear Jensen Hong would be very rosy at least in his interview with Yahoo Finance, about the work that Elon Musk is doing at Tesla talking a little bit of smidge about Xa, I as well there and for XAI.

I think, as they're continuing to try and get a grasp of how many chips that they'll need in order for artificial, I mean, think about the data centres.

It's 60,000.

Uh, I think it was.

We had a a guest on yesterday, Beth Kendig, who had pointed to a $10 trillion valuation one day that, uh, NVIDIA could get to.

And it's on the back of growth in the data centre as well.

Where Jensen Wong is talking about a data centre that could have 1 million chips in it.

And so 60,000 chips, as of right now, um, is what they're already talking about.

So all of these things considered Xa I is going to require an artificial intelligence as a whole is going to require a tonne of chips in these data centres in order for them to be able to have the compute power to process and have the influential kind of connectivity of all these troves of data.

Uh, it's really only gonna be multiplied when you think about the number of interactions that are gonna have to take place with a I that only add on a significant multiplier or even, you know, uh, I mean, my goodness, like it's it's just it's mind blowing almost at the end of the day like it's It's such a huge story, and I think that's why I mean, we initially did see Tesla's share price drop 1% on the news, which I think just goes to show that to your broader point.

Brad, this is such a big deal for markets in terms of what we're seeing from company demand for chips.

Anything related to NVIDIA within each individual company is going to move potential stock.

Exponential is the word I was looking for.

Exponential.

There you go, great word of the day.