Tesla and xAI, two tech companies within Elon Musk's business empire, heavily invest in Nvidia's hardware for artificial intelligence (AI) development, despite Tesla's aspirations to develop its supercomputer to rival Nvidia's systems. 

Nvidia's Increasing Dominance

At an all-hands meeting in November 2023, Nvidia CEO Jensen Huang made it clear that the chipmaker was not advertising on the controversial platform X and had no intentions of doing so. 

Insiders told CNBC that this decision followed rising concerns over hate speech and antisemitism on the platform, prompting several major brands like Disney and Apple to suspend their ad campaigns. Despite this, Nvidia's collaboration with Elon Musk's business empire is "getting increasingly cozy." 

Dominating the AI chips markets for months now, Nvidia reached a new high of $2.06 trillion valuation earlier this month, breaking beyond the $2 trillion barrier. Nvidia's revenue has skyrocketed, with its latest quarterly earnings reaching $22.1 billion, surpassing even industry giant Intel in total sales. 

The company's products, including accelerator chips, are in high demand. They cater to various sectors riding the AI boom, such as generative AI workloads, robotics, research, and data center projects.

READ MORE: Nvidia CEO Jensen Huang Believes Human-Level AI Could Arrive in 5 Years

Nvidia and Elon Musk's Companies

Elon Musk, known for his ambitious AI initiatives, has been vocal about the importance of Nvidia's technology for his company's AI endeavors. 

In a conversation at the Abundance360 Summit, Musk credited Nvidia's foresight in AI hardware development, emphasizing its critical role in advancing AI capabilities. He predicted a significant increase in AI computing power in the coming years, with Nvidia poised to benefit from this exponential growth.

Musk's xAI startup utilizes Nvidia GPUs to accelerate the training and inference of its AI chatbot, the Grok model. Meanwhile, Tesla, primarily recognized as an electric vehicle manufacturer, is also heavily involved in AI research. The company has been developing AI software for autonomous vehicles and is now venturing into humanoid robots with the Tesla Bot, or Optimus. Despite these efforts, Musk often emphasizes that Tesla is more than just a car company, referring to it as an AI/robotics company.

Tesla's plans to build a "Dojo supercomputer" were unveiled in August 2021. The computer would process vast amounts of data captured by Tesla vehicles for AI model training. 

Although Tesla is pursuing its supercomputer project, Musk revealed that the company would spend more than $500 million on Nvidia hardware in a year, underscoring the significance of Nvidia's technology in AI development.

However, Musk's relationship with Nvidia has not always been smooth. Musk previously criticized Nvidia, calling it monopolistic, and hinted at the development of competitive chips. 

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