Elon Musk Told Nvidia to Ship AI Chips Reserved for Tesla to X
Lora Kolodny, reporting for CNBC:
On Tesla’s first-quarter earnings call in April, Musk
said the electric vehicle company will increase the number of
active H100s — Nvidia’s flagship artificial intelligence chip — from 35,000 to 85,000 by the end of this year. He also
wrote in a post on X a few days later that Tesla
would spend $10 billion this year “in combined training and
inference AI.”
But emails written by Nvidia senior staff and widely shared inside
the company suggest that Musk presented an exaggerated picture of
Tesla’s procurement to shareholders. Correspondence from Nvidia
staffers also indicates that Musk diverted a sizable shipment of
AI processors that had been reserved for Tesla to his social media
company X, formerly known as Twitter. […]
By ordering Nvidia to let privately held X jump the line ahead of
Tesla, Musk pushed back the automaker’s receipt of more than $500
million in graphics processing units, or GPUs, by months, likely
adding to delays in setting up the supercomputers Tesla says it
needs to develop autonomous vehicles and humanoid robots.
The argument against one person being the CEO of multiple companies is generally about distraction/attention — that each CEO gig demands all of one’s available time. But here’s a case where two of Musk’s companies are in direct conflict with each other. Musk seemingly treats all of his companies as subsidiaries of his own personal fiefdom conglomerate, but that’s not the case. And unlike X Corp, Tesla Motors is publicly traded.
Matt Levine, in his Money Stuff column:
The extremely obvious answer is that you should not be the CEO and
controlling shareholder of two different companies that compete
for the same inputs! There is not a good answer! You can’t,
like, put this problem into the Good Governance Machine and have
it come out clean. The problem is that you have a fiduciary
obligation to the shareholders of one company to put their
interests first, and you have a fiduciary obligation to the
shareholders of the other company to put their interests first,
and you cannot do both. This is why one person is not usually the
CEO of two different companies that compete with each other, and,
when someone is, people get mad at him all the time.
I can’t recall a situation like this when, say, Jack Dorsey was CEO of Twitter and Square, or, going back further, when Steve Jobs was CEO of Apple and Pixar. In those cases it was more like an athlete who played two different sports, like Bo Jackson or Deion Sanders. Fans of one their teams might argue that they could do even better in that one sport by concentrating on it year-round, but you couldn’t argue that the Kansas City Royals were competing against the Oakland Raiders. With Musk and AI, it’s like he’s playing on several competing teams within the same league.
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Lora Kolodny, reporting for CNBC:
On Tesla’s first-quarter earnings call in April, Musk
said the electric vehicle company will increase the number of
active H100s — Nvidia’s flagship artificial intelligence chip — from 35,000 to 85,000 by the end of this year. He also
wrote in a post on X a few days later that Tesla
would spend $10 billion this year “in combined training and
inference AI.”
But emails written by Nvidia senior staff and widely shared inside
the company suggest that Musk presented an exaggerated picture of
Tesla’s procurement to shareholders. Correspondence from Nvidia
staffers also indicates that Musk diverted a sizable shipment of
AI processors that had been reserved for Tesla to his social media
company X, formerly known as Twitter. […]
By ordering Nvidia to let privately held X jump the line ahead of
Tesla, Musk pushed back the automaker’s receipt of more than $500
million in graphics processing units, or GPUs, by months, likely
adding to delays in setting up the supercomputers Tesla says it
needs to develop autonomous vehicles and humanoid robots.
The argument against one person being the CEO of multiple companies is generally about distraction/attention — that each CEO gig demands all of one’s available time. But here’s a case where two of Musk’s companies are in direct conflict with each other. Musk seemingly treats all of his companies as subsidiaries of his own personal fiefdom conglomerate, but that’s not the case. And unlike X Corp, Tesla Motors is publicly traded.
Matt Levine, in his Money Stuff column:
The extremely obvious answer is that you should not be the CEO and
controlling shareholder of two different companies that compete
for the same inputs! There is not a good answer! You can’t,
like, put this problem into the Good Governance Machine and have
it come out clean. The problem is that you have a fiduciary
obligation to the shareholders of one company to put their
interests first, and you have a fiduciary obligation to the
shareholders of the other company to put their interests first,
and you cannot do both. This is why one person is not usually the
CEO of two different companies that compete with each other, and,
when someone is, people get mad at him all the time.
I can’t recall a situation like this when, say, Jack Dorsey was CEO of Twitter and Square, or, going back further, when Steve Jobs was CEO of Apple and Pixar. In those cases it was more like an athlete who played two different sports, like Bo Jackson or Deion Sanders. Fans of one their teams might argue that they could do even better in that one sport by concentrating on it year-round, but you couldn’t argue that the Kansas City Royals were competing against the Oakland Raiders. With Musk and AI, it’s like he’s playing on several competing teams within the same league.