Elon Musk's xAI and Tesla to Continue Massive GPU Purchases from Nvidia and AMD

Elon Musk says xAI expects to keep buying GPUs from Nvidia and AMD

Elon Musk interviews on CNBC from the Tesla Headquarters in Texas. Elon Musk said Tuesday that he expects Tesla and xAI will continue buying chips from semiconductor giants Nvidia and AMD, and possibly others. Musk's artificial intelligence company, xAI, which now owns X (formerly Twitter) has already installed 200,000 GPUs at its Colossus facility in Memphis, the Tesla CEO told CNBC's David Faber on Tuesday. XAI is also planning a 1 million GPU facility outside of Memphis, Musk said. He did not specify how many chips the company had already ordered and by which date they may be installed. "A few years ago, I made a very obvious prediction, which is that the limitation on AI will be chips," he said. At his autos business, Tesla, Musk said the company's Dojo supercomputer in Buffalo, New York is already used for training its Autopilot and Optimus robotics systems.

Tesla and xAI Plan to Keep Buying Chips From Nvidia and AMD, Musk Says

Musk said xAI, the company behind the Grok large language model, plans to build a facility near Memphis that will house 1 million GPUs. The X platform parent has already installed 200,000 chips at an existing facility in the area, Musk said. Meanwhile, Tesla needs "quite a few" GPUs for training its Optimus humanoid robots, Musk said. "We expect to still buy a lot of GPUs from Nvidia, some from AMD, and maybe from others," Musk said. "So long as Nvidia is better than what we make, we'll keep buying from Nvidia." Nvidia, which saw its shares surge over the past week after announcing a major deal to supply chips to Saudi AI startup Humain, is due to report earnings next week. Shares of AMD and Tesla had also rallied last week amid optimism that a series of AI partnerships announced during President Donald Trump's four-day trip to the Middle East could mean more deals to come. In a separate interview Tuesday, Musk told attendees of the Qatar Economic Forum he remains committed to being CEO of the electric vehicle maker for at least the next five years. Shares of Tesla, AMD, and Nvidia were little-changed in after-hours trading, after Tesla eked out a 0.5% gain during Tuesday's regular session, while AMD and Nvidia lost about 1%.

Elon Musk's xAI Plans $30-$40 Billion GPU Buy Near Memphis -- Gene Munster Says Its A 'Good Day' To Be A Nvidia Salesperson - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)

On Tuesday, Deepwater Asset Management's managing partner, Gene Munster, noted that Elon Musk's AI enterprise xAI's plans for a massive investment could result in Nvidia Corporation NVDA as the biggest beneficiary. What Happened: In a post on X, formerly Twitter, Munster highlighted Musk's revelation on CNBC that his AI company, xAI, plans to deploy 1 million GPUs near Memphis. The majority of the 1 million GPUs expected to be deployed will come from Nvidia, with a smaller portion supplied by Advanced Micro Devices AMD, said Munster, adding that the estimated total cost of acquiring these chips could range between $30 billion and $40 billion. See Also: Trump Again Promises Lower Drug Prices By 'Cutting Out Middlemen' Like UnitedHealth, CVS: Will It Work This Time? "If it was done in CY26, it would account for about 15% of the current Street revenue estimate," he stated, adding, "Good day to be an Nvidia salesperson." Why It's Important: Nvidia is scheduled to release its first-quarter earnings on May 28 after the market closes. Analysts, as per Benzinga Pro, expect the company to post earnings of 89 cents per share on revenue of $43.07 billion. The stock currently holds a consensus price target of $172.32, based on ratings from 39 analysts. The highest target, $220, was issued by Rosenblatt on Feb. 24, 2025. Get StartedEarn 7.2% -- No Matter What the Fed Does Markets expect rate cuts -- but your earnings don't have to suffer. Lock in 7.2% until 2028 from ten individual bonds. Get Started Recent updates from BofA Securities, UBS and Seaport Global have set an average price target of $145, indicating a potential upside of 8.21%. Price Action: Nvidia shares have dropped 0.28% in after-hours trading, currently sitting at $134, according to Benzinga Pro data. According to Benzinga Edge Stock Rankings, Nvidia holds a robust growth score of 95.02%. Click here to see how it compares to other leading tech companies. Photo Courtesy: Hepha1st0s On Shutterstock.com Read Next: Nvidia Climbs On Saudi AI Investments: Analyst Estimates $15 Billion To $20 Billion In Revenue Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMDAdvanced Micro Devices Inc$114.35-0.34%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum22.34Growth82.73Quality72.56Value15.55Price TrendShortMediumLongOverviewNVDANVIDIA Corp$134.00-1.16%Market News and Data brought to you by Benzinga APIs

AMD, Nvidia Shares Jump After Musk Highlights xAI's GPU Needs: 'We Expect To Still Buy A Lot' - Advanced Micro Devices (NASDAQ:AMD)

Shares of Advanced Micro Devices Inc AMD and NVIDIA Corp NVDA are moving higher in Tuesday's after-hours session after Tesla Inc TSLA CEO Elon Musk announced that the company expects to purchase "a lot" of GPUs from the chip companies. What Happened: In an interview aired on CNBC's "Closing Bell: Overtime," Musk laid out a vision for the future that includes millions of fully autonomous robotaxi vehicles and Optimus bots. When asked how many GPUs the company will need to make that vision a reality, Musk said "quite a few." "We expect to still buy a lot of GPUs from Nvidia, some from AMD, and maybe from others," Musk said. "As long as Nvidia is better than what we make, we'll keep buying from Nvidia." Musk told CNBC that his vision is less than five years away. He also noted that his AI company xAI plans to continue buying GPUs from Nvidia. He highlighted the AI company's training cluster, which he believes is the most powerful in the world right now, with over 200,000 GPUs at its facility in Memphis. Musk also told CNBC that xAI is in the process of building a second location that will feature one million Nvidia Blackwell GPUs, expected to be completed in the next six to nine months. "It will be the first gigawatt-class training cluster in the world," he said. In after-hours at the time of publication on Tuesday, AMD shares were up 0.77% at $114.38 and Nvidia shares were narrowly higher, up 0.11% at $134.52 at last check, according to Benzinga Pro. Photo: courtesy of Nvidia. AMDAdvanced Micro Devices Inc $114.36-0.33% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum 22.34 Growth 82.73 Quality 72.56 Value 15.55 Price Trend Short Medium Long Overview NVDANVIDIA Corp $134.56-0.74% TSLATesla Inc $344.260.63% Market News and Data brought to you by Benzinga APIs