Elon Musk’s thirst for chips is straining Nvidia’s ability to make them: report

• Elon Musk’s demand for Nvidia chips has put pressure on the company to deliver.

• An Nvidia sales manager told colleagues in an email that their supply chain was under pressure, according to the Journal.

• An Nvidia spokesperson told BI that the company has “worked hard to meet the needs of all customers.”

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

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

The Journal report, published Wednesday, does not specify when the email was sent.

When reached for comment, an Nvidia spokesperson told Business Insider that the company had “worked hard to meet the needs of all customers.”

Nvidia has also “significantly expanded the available offering” 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 for technology companies, which use them to train and deploy their AI models.

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

“We’ve developed the ability to do this at a scale that may be larger than any individual company. I think a lot of people may not like that,” Zuckerberg told the outlet.

Meanwhile, Musk has amassed his own war chest. 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 stayed in a warehouse,” Musk told X in response to the CNBC 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. Additionally, it will double in size to 200,000 (50,000 H200s) in a few months,” Musk said in his post.

This technical feat was praised by Nvidia founder and CEO Jensen Huang, who called it a “superhuman” feat.

“As far as I know, there is only one person in the world who could do this. Elon is unique in his understanding of engineering, construction, large systems and resource mobilization,” Huang said in an interview on the “Bg2 Pod” podcast. broadcast on October 13.

“It’s just amazing,” Huang added.

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

Larry Ellison, co-founder and chairman of Oracle, said in a September conference call that he and Musk asked Huang for more GPUs while the three were having dinner.

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

Strong demand for chips has made Nvidia one of the most valuable companies in the world.

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

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