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Elon Musk’s hunger for chips is taxing Nvidia’s capacity to make them: report

Elon Musk’s hunger for chips is taxing Nvidia’s capacity to make them: report
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Elon Musk speaking at a Trump campaign rally in Madison Square Garden in New York; Jensen Huang speaking at the Bipartisan Policy Center in Washington, DC.
A Nvidia sales lead said in an email to colleagues that Musk’s demand for chips was straining the company’s supply chain, per The Wall Street Journal.

  • Elon Musk’s demand for Nvidia chips has put pressure on the company to deliver.
  • A Nvidia sales lead told colleagues in an email that their supply chain was under strain, per the Journal.
  • A Nvidia spokesperson told BI that the company has “worked hard to meet the needs of all customers.”

Nvidia is feeling the pressure from trying to meet Elon Musk’s insatiable demand for chips.

Musk’s demand for chips was straining the chip giant’s supply chain, a sales lead for Nvidia told colleagues in an email obtained by The Wall Street Journal.

The Journal’s report, which was published on Wednesday, did not specify when the email was sent.

When approached for comment, a spokesperson for Nvidia told Business Insider that the company has “worked hard to meet the needs of all customers.”

Nvidia has also “greatly expanded the available supply” of its chips, the spokesperson added.

Musk did not respond to a request for comment from BI.

Nvidia’s chips have become a hot commodity among tech companies, who use them to train and deploy their AI models.

In January, Meta CEO Mark Zuckerberg told The Verge in an interview that Meta would own more than 340,000 Nvidia H100 GPUs by the end of 2024.

“We have built up the capacity to do this at a scale that may be larger than any other individual company. I think a lot of people may not appreciate that,” Zuckerberg told the outlet.

Musk, meanwhile, has been building his own war chest of chips. The billionaire launched his own AI startup, xAI, in 2023 and has since raised billions of dollars in funding.

In June, CNBC reported that Musk had redirected $500 million worth of Nvidia chips from Tesla to X and xAI.

“Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse,” Musk said on X in response to CNBC’s story.

Then, in September, Musk announced that xAI had brought a massive new training cluster of Nvidia chips online.

The system, dubbed Colossus, was built using 100,000 Nvidia H100 GPUs in Memphis, Tennessee, in 122 days, Musk wrote on X.

“Colossus is the most powerful AI training system in the world. Moreover, it will double in size to 200k (50k H200s) in a few months,” Musk said in his post.

The engineering feat was praised by Nvidia’s founder and CEO, Jensen Huang, who called it a “superhuman” feat.

“As far as I know, there’s only one person in the world who could do that. Elon is singular in his understanding of engineering and construction and large systems and marshaling resources,” Huang said in an interview on the “Bg2 Pod” podcast that aired on October 13.

“It’s just unbelievable,” Huang added.

Musk and Zuckerberg aren’t the only tech executives hungry for Nvidia’s chips.

Larry Ellison, the cofounder and chairman of Oracle, said in an earnings call in September that he and Musk had asked Huang for more GPUs while the three were having dinner.

“I would describe the dinner as me and Elon begging Jensen for GPUs,” Ellison said.

The robust demand for chips has turned Nvidia into one of the most valuable companies in the world.

Nvidia announced its third-quarter earnings on November 20, where it recorded $35.08 billion in revenue for the quarter — a 94% year-over-year increase. The company’s shares are up by 173% year to date.

Read the original article on Business Insider



This article was originally published by Kwan Wei Kevin Tan at All Content from Business Insider – Read this article and more at (https://www.businessinsider.com/elon-musk-hunger-for-chips-taxing-nvidia-supply-chain-2024-11).

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