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Elon Musk shopping for Nvidia {hardware} whilst Tesla goals to construct AI rival

Tesla CEO, Elon Musk (L), and Nvidia CEO, Jensen Huang (R).


In November 2023, at an all-hands assembly with staff, Nvidia CEO Jensen Huang was requested whether or not the corporate would comply with the lead of Apple and Disney and droop its promoting on X attributable to rising ranges of antisemitism and different hate speech on the platform.

X proprietor Elon Musk mentioned earlier that month that he agreed with a post on the positioning that accused “Jewish communities” of pushing “hatred towards whites.” Quite a few manufacturers — Disney and Apple amongst them — moved rapidly to pause their advert campaigns.

Huang’s response was agency however diplomatic, in keeping with individuals who have been listening to the assembly however requested to not be named as a result of they weren’t approved to talk to the press. He mentioned the chipmaker hadn’t marketed on X in a really very long time and had no plans to take action. Nevertheless, Huang additionally emphasised that Nvidia would by no means make public statements towards one other enterprise.

Unnoticed of Huang’s commentary on the time was any element relating to Nvidia’s rising coziness with Musk’s enterprise empire.

Nvidia is seeing hovering demand for its graphics processing models (GPUs) and associated {hardware} and providers, a growth that is lifted the corporate’s market cap well past $2 trillion. Nvidia’s merchandise, together with new accelerator chips, present computing energy for generative synthetic intelligence workloads, robotics, analysis and knowledge heart tasks.

Income within the latest quarter jumped a whopping 265% to $22.1 billion, and final 12 months Nvidia surpassed Intel in whole gross sales.

Musk has made guarantees that his firms will develop subtle AI merchandise, and doing so requires shopping for up lots of Nvidia’s expertise.

Their cozy relationship was on show this week at Nvidia’s annual GTC conference in San Jose, California. The occasion, which attracted roughly 16,000 attendees together with celebrities like Ashton Kutcher and Kendrick Lamar, had two classes that includes leaders of xAI, the startup Musk formally revealed in July 2023.

The next leg of the AI rally

Christian Szegedy, a co-founder and analysis scientist at xAI who beforehand labored at Google, spoke at a fireplace chat with Bojan Tunguz, an information scientist at Nvidia. One other co-founder and analysis engineer from xAI, Igor Babuschkin, a veteran of OpenAI and Google, gave an summary of how Musk’s startup is utilizing Nvidia GPUs to assist “speed up coaching and inference of their Grok mannequin,” referring to the startup’s AI chatbot.

In Nvidia’s press release on Monday asserting the launch of its Blackwell AI chips, Musk was quoted saying, “There’s presently nothing higher than NVIDIA {hardware} for AI.”

Musk, who helped create OpenAI earlier than a public split with CEO Sam Altman and different founders, launched xAI to develop AI fashions and software program merchandise.

In the meantime, his electrical car maker Tesla has spent years engaged on AI software program to show its automobiles into autonomous automobiles. It is also now growing the Tesla Bot, or Optimus, a humanoid robotic.

Whereas the overwhelming majority of Tesla’s income comes from its automotive enterprise, Musk usually encourages shareholders to think about it in another way. In January he mentioned, in a post on X, “Tesla is an AI/robotics firm that seems to many to be a automobile firm.”

Tesla first mentioned plans to construct a “Dojo supercomputer” at an AI Day presentation in August 2021. The goal for Dojo was to course of and practice AI fashions with large quantities of video and knowledge captured by Tesla automobiles.

‘Boy, do they need much more GPUs’

Nvidia is on the coronary heart of its AI efforts. Final August, former Tesla AI engineer Tim Zaman posted on X {that a} Tesla AI cluster, constructed utilizing 10,000 of Nvidia’s H100 chips, was able to go dwell.

Musk mentioned a publish on X in January that whereas a Dojo supercomputer value $500 million to construct, “Tesla will spend greater than that on Nvidia {hardware} this 12 months.” He added, “The desk stakes for being aggressive in AI are not less than a number of billion {dollars} per 12 months at this level.”

And on Tesla’s fourth-quarter earnings name in January, an analyst requested Tesla executives to offer an replace on Dojo, and whether or not the corporate had a “ample provide of Nvidia GPUs wanted for the coaching of the system.”

Musk mentioned Tesla was “pursuing the twin path of Nvidia and Dojo,” seemingly implying that it is constructing Dojo with out Nvidia’s expertise however utilizing it elsewhere. Musk described Dojo as “an extended shot price taking as a result of the payoff is probably very excessive. However it’s not one thing that may be a excessive chance.”

Oracle founder Larry Ellison, an in depth good friend of Musk’s, former Tesla board member and investor in X, mentioned in December on his firm’s earnings name that xAI had secured Nvidia GPUs by means of Oracle to create the primary model of Grok, however that Oracle wasn’t capable of meet Musk’s calls for.

“Boy, do they need much more GPUs than we gave them,” Ellison mentioned. “We gave them fairly a couple of, however they wished extra and we’re within the strategy of getting them extra.”

Larry Ellison, chairman and co-founder of Oracle Corp., speaks through the Oracle OpenWorld 2017 convention in San Francisco, California, U.S., on Sunday, Oct. 1, 2017. 

David Paul Morris | Bloomberg | Getty Pictures

Whereas Musk and Huang have a longstanding connection and at the moment are doing extra enterprise collectively than ever, the connection hasn’t at all times appeared pleasant.

Final June, Musk went so far as to call Nvidia monopolistic, in response to a publish on X that accused Nvidia of “spiking the value” of its GPUs, which it might do due to the availability scarcity.

Musk wrote that aggressive chips have been in improvement, and that “Nvidia won’t have a monopoly on large-scale coaching & inference without end.”

The remarks failed to impress Huang.

Talking at The New York Instances’ DealBook summit a couple of months later, Huang credited Musk and OpenAI for the choice to develop Nvidia’s first AI supercomputer, the DGX system, beginning again in 2012.

Huang mentioned it took Nvidia about 5 years to excellent and ship the supercomputer, which he personally delivered to Musk to be used by OpenAI.

“Elon noticed it, and he goes, ‘I need a type of’ — he informed me about OpenAI,” Huang said on stage. “I delivered the world’s first AI supercomputer to OpenAI on that day.”

A spokesperson for Nvidia declined to remark. Tesla and xAI did not reply to requests for remark.

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