• Elon Musk redirected $500 million in AI processors from Tesla to X, CNBC reported.

• The move could delay Tesla’s development of autonomous vehicles and humanoid robots.

• The news comes before shareholders will vote on Musk’s contested $55 billion proposed pay package.

Elon Musk diverted $500 million worth of AI processors meant for the carmaker, according to correspondence from Nvidia employees obtained by CNBC.

Instead, he sent them to his social media platform X, the report, which was published Tuesday, said.

“Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead,” an Nvidia memo from December said, according to the report. “In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”

Business Insider did not review the documents. Nvidia declined to comment.

The decision to prioritize X comes after Musk said Tesla would double the number of H100s by the end of the year in Tesla’s first-quarter earnings call. The chips, which cost upwards of $40,000, power AI technologies like ChatGPT and Anthropic.

The billionaire also previously said he would grow the EV giant into a “leader in AI & robotics” and posted on X that Tesla would spend around $10 billion this year in “combined training and inference AI.” Delaying the GPUs could set back Tesla’s supercomputer development by months, hindering progress on self-driving cars and robots.

As it turns out, Musk may have overestimated Tesla’s capabilities. An Nvidia email from April said his comment on the first-quarter Tesla call and his post about spending $10 billion on AI “conflicts with bookings,” according to the report. The email also referenced Tesla layoffs and said job cuts could further delay an “H100 project” at Tesla’s Texas Gigafactory, the report said.

Musk previously said in a post on X that he was “uncomfortable” expanding the EV company’s AI and robotics capabilities without 25% of voting control. He said he would “prefer to build products outside of Tesla” until he had that control.

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The diversion of chips from Tesla shows Musk is sticking to his word and highlights the ongoing tension between Musk and shareholders who question his commitment to the EV company.

One analyst asked Musk during the first-quarter earnings call if the CEO was spread too thin. Musk also owns and is the CTO of X, and serves as the CEO of SpaceX, Neuralink, and The Boring Company.

This leak comes at a critical time, just ahead of Tesla’s annual shareholder meeting on June 13th. The news adds pressure as Musk faces an already contentious battle for his proposed $55 billion pay package, with several investment firms advising against it. Earlier this year, a Delaware judge blocked the package, citing concerns about Musk’s undue influence over the board because of his close ties to several members.

The executive pay plan, first approved in 2018, involves a 10-year grant of 12 tranches of stock options that are vested when Tesla hits specific targets. When the company hits each goal, Musk gets stock equal to 1% of outstanding shares. Tesla said it hit all 12 targets as of 2023.

The carmaker has argued the pay package is necessary to maintain Musk’s focus on Tesla. In a series of advertisements and messages to shareholders, Tesla has continued to argue that the plan is critical to Tesla’s success and a matter of properly compensating Musk, who doesn’t receive a salary.

Tesla did not respond to a request for comment.

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