Tesla CEO Elon Musk Justifies Diverting Nvidia Chips After Ross Gerber's Remark: 'Not A Matter Of Tucking A Few Computers Into A Corner'

Tesla Inc TSLA CEO Elon Musk on Wednesday slammed investor Ross Gerber after the latter termed his decision to redirect Nvidia Corp‘s chips meant for Tesla to X and xAI as “weird.”

What Happened: “The existing factory space was already allocated to vehicle, battery and cell production,” Musk explained.

While Giga Texas indeed covers 2500 acres along the Colorado River with over 10 million square feet of factory floor, installing thousands of chips is not a matter of tucking a few computers into a corner, Musk said.

“You need a kW of power and cooling for each GPU, which would mean 12MW of power and 12MW of cooling,” the CEO wrote.

The south extension of the Texas gigafactory which is under construction is custom-built for heavy power compute and has huge cooling towers, Musk said, adding that the extension, once complete, will house 50,000 H100s, 20,000 Tesla HW4 AI computers, and massive video storage.

“Important to note that FSD training requires massive liquid-cooled Tesla AI compute and video storage, not just Nvidia,” he added.

Gerber’s Thoughts: Following reports that he redirected 12,000 of Nvidia's H100 chips reserved for Tesla to his other companies and xAI, Musk said the decision was made due to a lack of space to activate the chips at Tesla. 

Gerber Kawasaki Wealth and Investment Management CEO Gerber, however, termed the reasoning as weird. "To say that you don’t have room for something is a weird excuse for the biggest factory I’ve ever seen," he said.

Gerber added that Musk's motivation for diverting the chips is to focus on robotics and "robotaxi idea" at xAI over autonomous self-driving at Tesla.

"Full self-driving is one solution of AI. So, by using xAI, he controls the brains that would control everything else and that's what this is all about," he added.

Why It Matters: Earlier this week, Musk revealed that Tesla would spend $3 billion to $4 billion this year on hardware purchases from Nvidia and a majority of its remaining $10 billion AI-related budget internally. Within the company, Tesla will spend on AI inference computers, the sensors present in its cars, and its Dojo supercomputer, Musk said.

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