Tesla (TSLA) Chief Executive Elon Musk confirmed Tuesday a CNBC report that in December he had Nvidia (NVDA) send AI processors earmarked for the EV giant instead to his social media enterprise X, formerly Twitter, which Musk purchased in October 2022. TSLA stock angled down slightly in trade Tuesday.

X

Musk wrote on X Tuesday that “Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse.” The Tesla chief added that when the extension to Tesla’s Texas factory is complete, the H100 Nvidia chips will be housed there to train Tesla Full Self-Driving, or FSD.

Before the market opened Tuesday, CNBC reported on internal Nvidia emails in which employees discussed how Musk was “prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead.” That December 2023 memo went on to say that “original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”

The CNBC report also covered an internal Nvidia email from late April. In that memo, Nvidia employees called into question Musk’s claims Tesla is spending $10 billion on AI.

The news that Musk shifted Nvidia AI chip shipments from Tesla to X comes ahead of Tesla’s annual meeting next week. Shareholders are currently voting in the run-up to the meeting on whether to reapprove Musk’s 2018 $56 billion compensation package.

Tesla Stock: A Controlled Threat

Musk has hinted throughout the year that he feels he needs more TSLA shares and voting power.

In January, Musk posted on X that he’s “uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control.” The chief executive added that he wants enough shares to be “influential but not so much that I can’t be overturned.”

“This is primarily about ensuring the right amount of voting influence at Tesla,” Musk said. “At 15% or lower the for/against ratio to override me makes a taker by dubious interests too easy.”

Musk currently has a nearly 13% stake in Tesla. Prior to selling TSLA shares to purchase Twitter, now X, for $44 billion in late 2022, Musk owned around 22% of Tesla.

Since issuing that warning, Tesla and Musk have appeared to be shifting toward an increased focus on autonomy, its Full Self-Driving (FSD) technology and its robotaxi program as EV demand has slowed.

His XAI artificial intelligence startup company has already hired away a number of Tesla staff.

Tesla Stock Performance

TSLA shares edged down 0.5% to 175.45 on the stock market today. Tesla stock dropped 1% to 176.29 on Monday. TSLA shares dropped 2.8% in May and have sunk around 30% so far this year.

News reports circulated early Friday that Tesla reduced vehicle prices in Denmark.

Meanwhile, Reuters reported last week that Tesla is preparing to register Full Self-Driving, or FSD, with China regulators.

After registration, Tesla can have employees test FSD on public roads in China. The company can then offer it as an upgrade to customers in the coming months, according to Reuters.

Tesla has rallied since reporting first-quarter earnings and revenue on April 23, finding support at its 50-day moving average, according to MarketSurge analysis. On April 22, Tesla stock hit a 52-week low of 138.80.

The EV giant will report second-quarter earnings in mid-July.

Tesla stock ranks seventh in the 35-member IBD Auto Manufacturers industry group. The stock has a weak 40 Composite Rating out of a best-possible 99. Shares have a 16 Relative Strength Rating and a 62 EPS Rating.

Please follow Kit Norton on X @KitNorton for more coverage.

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