Elon Musk's increasing demand for Nvidia graphics processing units (GPUs) is exerting significant pressure on the chip manufacturer's production capabilities, as reported by the Wall Street Journal on November 28, 2024.
An internal email from a Nvidia sales lead indicated that Musk's aggressive acquisition of chips is straining the company's supply chain. Musk is rapidly expanding his AI startup xAI's computing infrastructure, particularly with the Colossus data center in Memphis, Tennessee.
In June, Musk reallocated $500 million worth of Nvidia chips from Tesla to xAI and X. By September, xAI had launched a training cluster consisting of 100,000 Nvidia H100 GPUs, which Musk claims is the most powerful AI training system globally.
Nvidia's CEO Jensen Huang praised Musk's engineering achievements, describing them as 'superhuman.' The demand for GPUs is also felt by other tech giants, including Meta, which are stockpiling significant inventories.
Nvidia reported $35.08 billion in quarterly revenue, a 94% increase year-over-year, partly due to Musk's demand. xAI has raised at least $11 billion, reaching a valuation of $50 billion.
Plans are underway for xAI to double its Colossus data center to 200,000 GPUs, further escalating the demand for these essential AI resources.