Is Musk giving up on Tesla?

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Tesla CEO Elon Musk is reportedly diverting important AI hardware shipments away from Tesla in favor of his social media platform X and his AI startup xAI.

As CNBC reports, emails widely circulating within Nvidia suggest that Musk instructed the chipmaker to prioritize the shipment of thousands of H100 AI chips, previously reserved for Tesla, to X and xAI instead.

H100 chips have quickly emerged as the cornerstone of many AI companies' ambitions, making them incredibly difficult to come by and exceedingly expensive.

The latest report is a striking development considering Musk has long threatened to divert his AI ambitions away from Tesla, going as far as to "blackmail" investors earlier this year. In January, he tweeted that he's "uncomfortable growing Tesla to be a leader in AI and robotics without having [about] 25 percent voting control," infuriating shareholders.

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According to CNBC, the diversion of resources means that Tesla's AI ambitions could be pushed back by months. And that doesn't bode well, considering the company is already in dire straits, facing a disastrous financial year ahead and hugely hyped driver assistance software that still isn't living up to Musk's immense promises.

That's pertinent because Musk has bet much of the carmaker on the success of its so-called "Full Self-Driving" tech, which heavily relies on hardware like Nvidia's H100 chips, promising the unveiling of a "robotaxi" as soon as August.

An email obtained by CNBC suggests comments Musk made during Tesla's ill-fated first-quarter earnings call this year misconstrued how many chips were ordered and where they were destined. The email also noted that the company's continued layoffs could lead to delays with an existing "H100 project" at the EV maker's Texas factory.

In short, was Musk bluffing and misleading investors by favoring his social media platform and nascent AI startup? Is he jumping ship and abandoning Tesla when it needs him — and not his antics — the most?

The news will likely further anger shareholders who are already fuming over Musk and his board prioritizing the reinstatement of a controversial $56 billion pay package.

Tesla is in crisis mode, with share prices down almost 30 percent so far this year. And the outlook is grim, with waning overall demand for EVs and an influx of much cheaper cars from China tightening the screws.

Meanwhile, Musk continues to push the narrative that Tesla is putting AI and what it refers to "self-driving" tech first and foremost.

"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."

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