Tesla Faces Investor Anxiety As Musk Shifts AI Resources

Tesla CEO Elon Musk has reportedly diverted crucial AI hardware shipments away from Tesla, prioritizing his social media platform, X, and his AI startup, xAI. This move raises concerns about Tesla’s commitment to self-driving car technology and its financial stability.

Highly Sought-After Hardware

The diverted resources are Nvidia’s H100 AI chips, vital for many AI companies due to their limited availability and high cost. This decision comes after Musk previously hinted at shifting his AI focus away from Tesla, even angering investors by demanding greater control over the company.

Potential Delays for Tesla

CNBC reports suggest delays of several months for Tesla’s AI projects due to the resource diversion. This is particularly worrisome considering Tesla’s financial struggles and the under-delivery of its much-hyped driver-assistance software.

Elon Musk

Broken Promises and Investor Frustration

Musk has heavily relied on the success of Tesla’s “Full Self-Driving” technology, which hinges on hardware like the diverted H100 chips. He even promised a robotaxi launch by August 2024. Leaked emails suggest Musk might have misled investors regarding chip orders and their destinations. This raises questions about Musk’s commitment to Tesla during a crucial time.

Investor Ire and a Grim Outlook

The news is likely to further infuriate shareholders already upset by Musk’s focus on reinstating a controversial pay package. Tesla’s stock price has plummeted nearly 30% this year, with competition from cheaper Chinese EVs further tightening the market grip. Despite this, Musk continues to prioritize AI and self-driving technology for Tesla.

“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” he told investors during the first quarter earnings call. “We will, and we are.”

Reference- CNBC, Reuters, The Wall Street Journal, Futurism, Financial Express