Tesla And xAI To Continue Buying Nvidia Microchips, Says Elon Musk

Elon Musk said in an interview on CNBC that Tesla (TSLA) and his artificial intelligence (A.I.) start-up company xAI will continue buying lots of microchips from Nvidia (NVDA).

xAI, which now owns social media company X (formerly known as Twitter), has already installed 200,000 Nvidia graphics processing units (GPUs) at its facility in Memphis, Tennessee.

Musk says that the privately held A.I. start-up is also planning a one million GPU facility outside the City of Memphis.

Musk did not specify exactly how many microchips his companies plan to order or say when xAI might buy more chips from Nvidia, as well as Advanced Micro Devices (AMD).

However, over the past year, Musk has directed Nvidia to send a large order of GPUs to xAI first, ahead of electric vehicle maker Tesla.

Musk said Tesla’s Dojo supercomputer also has a need for microchips and processors, which are used for training Tesla’s autopilot feature and the company’s Optimus robotics systems.

Musk boasted in the interview that xAI’s facility in Memphis is the “most powerful training cluster in the world right now” with “over 200,000 GPUs training coherently.”

The demand by Musk’s various companies for advanced microchips and processors is good news for both Nvidia and AMD, and their future sales.

Nvidia’s stock has fallen 3% this year to trade at $134.38 U.S. per share.