$特斯拉(TSLA)$ MS: According to a CNBC article citing emails "circulated inside Nvidia and obtained by CNBC", Tesla CEO Elon Musk ordered $500mm worth of Nvidia H100 GPUs ordered by Tesla to be redirected to his social media company. Elon Musk replied to the story confirming the report and explaining: "Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse. The south extension of Giga Texas is almost complete. This will house 50k H100s for FSD training."
Irrespective of the above news story, we share 3 brief thoughts:
1. Without Elon Musk achieving a 25% voting stake in the company, we believe Tesla shareholders should be prepared for Tesla to significantly slow down/curtail its direct investment in sensitive/advanced AI efforts. Per the 4Q23 earnings call, when asked why he is uncomfortable expanding AI and robotics at Tesla without 25% of voting share, Mr. Musk said: "I see a path to creating an artificial intelligence and robotics juggernaut of truly immense capability and power… I'm not looking for additional economics. I just want to be an effective steward of very powerful technology."
2. While Tesla may still be in position to benefit indirectly from AI advancements, we believe that most of the adjacent AI efforts could be concentrated within non-Tesla entities where Elon Musk has control (in the event Mr. Musk does not reach a 25% voting share of Tesla).
3. While investor opinions around the June 13th shareholder vote are in flux, we believe there may be any number of potential paths for Elon Musk to achieve a 25% voting stake in Tesla (over time) even without the inclusion of the 2018 compensation package.