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

Nov 28, 2024 - businessinsider.com
Elon Musk's high demand for Nvidia chips has strained the company's supply chain, according to an internal email from a Nvidia sales lead. Despite the pressure, Nvidia has stated that it has worked hard to meet the needs of all customers and has expanded the supply of its chips. Tech companies, including Musk's AI startup xAI and Meta, have been accumulating Nvidia's chips for their AI models. Musk has even redirected $500 million worth of Nvidia chips from Tesla to xAI and brought a massive new training cluster of Nvidia chips online.

The high demand for Nvidia's chips, not just from Musk but also from other tech executives like Mark Zuckerberg and Larry Ellison, has made Nvidia one of the most valuable companies globally. The company reported a 94% year-over-year increase in its third-quarter earnings, recording $35.08 billion in revenue. Nvidia's shares have also seen a significant increase, up by 173% year to date.

Key takeaways:

  • Elon Musk's high demand for Nvidia chips is putting strain on the company's supply chain, according to an internal email from a Nvidia sales lead.
  • Nvidia has responded to the demand by working hard to meet the needs of all customers and expanding the available supply of its chips.
  • Musk's AI startup, xAI, has built a massive new training cluster of Nvidia chips called Colossus, which was praised by Nvidia's CEO, Jensen Huang.
  • The high demand for Nvidia's chips from tech giants like Musk and Mark Zuckerberg has contributed to Nvidia's significant growth, with the company recording $35.08 billion in revenue for the third quarter, a 94% year-over-year increase.
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