Chip

Elon Musk

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<p class="has-drop-cap">In a surprising move, Elon Musk has <a aria-label="reportedly instructed (opens in a new tab)" href="https://www.reuters.com/technology/musk-orders-nvidia-ship-ai-chips-reserved-tesla-x-xai-cnbc-reports-2024-06-04/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">reportedly instructed</a> Nvidia (NASDAQ: NVDA) to prioritize the delivery of AI chips to his companies, X and xAI, at the expense of Tesla (NASDAQ: TSLA). This decision has caused significant delays in Tesla’s receipt of over $500 million of processors, pushing the car company’s timeline back by several months.</p>
<p>Nvidia has refrained from commenting on the situation, while Tesla’s stock experienced a nearly 1% dip in premarket trading following the news. Internal emails from Nvidia revealed Musk’s directive and its conflict with previous procurement plans for Tesla.</p>
<h3 id="xai-will-receive-100-000-nvidia-ai-chips-by-end-of-the-year">xAI Will Receive 100,000 Nvidia AI Chips by End of the Year</h3>
<p>The redirected AI chips have led to setbacks in Tesla’s efforts to establish supercomputers crucial for developing autonomous vehicles and robots. <br><br>This situation highlights the ongoing conflicts of interest as Musk manages multiple companies simultaneously, raising concerns among Tesla shareholders about his divided attention and its potential impact on the company’s performance and strategic goals.</p>
<p>Launched by Elon Musk in 2023, xAI is an <a href="https://tokenist.com/3-small-cap-ai-stocks-with-serious-growth-potential/" rel="noopener noreferrer nofollow" class="deco-link">AI startup</a> closely tied to X (formerly Twitter), sharing data center resources and investors. <br><br>The company aims to develop generative AI products and position itself as a competitor to OpenAI. xAI will receive 100,000 Nvidia AI chips by the end of 2024, indicating a significant investment in AI infrastructure. <br><br>The startup has secured <a href="https://tokenist.com/ai-arms-race-chinas-47-billion-semiconductor-fund-musks-xai-secures-funding/" class="deco-link" rel="noopener noreferrer nofollow">$6 billion in financing,</a> supported by investors from Musk’s Twitter acquisition. xAI’s main product is a chatbot named Grok, which is marketed as a politically incorrect alternative to ChatGPT.</p>
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<h3 id="tesla-stock-dips-in-premarket-on-the-news">Tesla Stock Dips in Premarket on the News</h3>
<p>Tesla’s stock closed at $176.29, down 1.01%, with a market capitalization of $562.224 billion. The stock has decreased by 29.05% year-to-date. <br><br>The company’s trailing <a href="https://tokenist.com/investing/p-e-ratio/" rel="noopener noreferrer nofollow" class="deco-link">P/E ratio</a> is 45.11, while the forward P/E is 70.92. Tesla’s profit margin stands at 14.37%, with a return on assets (ROA) of 4.72% and a return on equity (<a href="https://tokenist.com/investing/growth-investing/" class="deco-link" rel="noopener noreferrer nofollow">ROE</a>) of 23.74%. The total revenue for the trailing twelve months (ttm) is $94.75 billion. <br><br>Tesla’s stock declined nearly 1% in <a href="https://tokenist.com/investing/how-to-trade-after-hours/" rel="noopener noreferrer nofollow" class="deco-link">premarket trading</a> following the announcement about the AI chips, and the stock’s 52-week range indicates volatility over the past year.</p>
<p>Tesla continues to face significant competition and internal challenges, including an aging vehicle lineup and strategic shifts towards AI and robotics.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><strong><em>Do you think the change in focus could affect Tesla</em></strong> <strong><em>in the long-term? Let us know in the comments below.</em></strong></p>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/nvidia-directed-to-prioritize-chip-shipments-for-xai-over-tesla-stock-slides/">Nvidia Directed to Prioritize Chip Shipments for xAI Over Tesla, Stock Slides</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Nvidia Directed to Prioritize Chip Shipments for xAI Over Tesla, Stock Slides

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