Elon Musk Claims Tesla’s AI-Related Nvidia Spend Could Reach $4 Billion in 2024.
Tesla (TSLA) CEO and founder Elon Musk has said that the electric vehicle (EV) pioneer plans to spend between $3 billion and $4 billion on Nvidia (NVDA) hardware for artificial intelligence (AI) training by 2024.
Musk said on X, another of his businesses, that his “current best guess for Nvidia purchases by Tesla are $3B to $4B this year.”
He said, “Of the roughly $10B in AI-related expenditures I said Tesla would make this year, about half is internal, primarily the Tesla-designed AI inference computer and sensors present in all of our cars, plus Dojo,” the supercomputer used by Tesla. Nvidia hardware accounts for around two-thirds of the cost of “building the AI training superclusters,” according to Musk.
Underscoring Nvidia’s AI dominance
Tesla’s Nvidia expenditure shows the chipmaker’s dominant position in the AI boom. Nvidia has emerged as a key benefactor of the AI age, with its stock more than doubling since the beginning of 2024, after a triple in 2023. The corporation now has the third-largest market value in the United States, after only Microsoft (MSFT) and Apple.
Bank of America researchers predicted that Nvidia will control more than 75% of the $90 billion AI accelerator market. In contrast, experts predict the remainder of the market to be split between Advanced Micro Devices (AMD) and Intel (INTC), as well as in-house proprietary processors by Alphabet’s Google (GOOGL), Microsoft, Amazon (AMZN), and Meta Platforms (META).
Nvidia has introduced Rubin, their next-generation AI system set to launch in 2026, replacing the impending Blackwell system, which experts have described as the “most ambitious project in Silicon Valley.” Analysts estimate that the yet-to-be-released Blackwell platform is already sold out until 2025.
Musk reportedly rerouted Tesla’s Nvidia chips to his other companies.
According to CNBC, Musk directed Nvidia to send AI processors designated for the EV manufacturer to his firms X and xAI.
The CEO seemed to acknowledge that he did reallocate Nvidia hardware intended for Tesla, stating in an X post in response to the CNBC piece, “Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse.”
The report may bolster some fears that Musk cannot prioritize Tesla since he is CEO of numerous firms other than the EV manufacturer, including xAI and SpaceX, and that he runs the various companies as if they were one organization sharing resources.
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