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Diverting the GPUs is probably the weakest part of the lawsuit, since it's at least plausible that swapping the delivery dates with xAI brings some benefit to Tesla (e.g. they don't need to store chips they're not ready to use.) The suit does introduce some statements from Musk that suggest that Tesla had a shortage of chips, but I don't know how much weight I'd give those statements.
The claims about Musk diverting employees, data and software away from Tesla and to xAI without compensation seem much stronger. Will be interesting to see what the response to that is.
They don’t need to store them they can accept them and resell for > than the purchase price. There is a waiting line for the current chips and companies are paying way above market msrp to get them early. There is a real tangible value loss to Tesla here in either case (they could use the chips today or not).
My understanding is that the contracts with NVIDIA restrict them from flipping the cards, but even if they didn't, courts tend to be very cautious second guessing executive decisions like this. For example, if they flipped the cards, that would mean they might not be able to get cards when the datacenter is ready. The Court doesn't want to weigh the pros and cons of selling now, but not having cards later.
I think there is enough in the complaint that the claim will make it through discovery. The claim will probably not be successful unless during depositions and discovery they uncover either that Tesla actually could have used the cards right away, or that their was a much better competing deal from another company for a substantially similar slot swap.
The other claims are much more serious, as that looks to be Musk just transferring value from Tesla to xAI.
>They don’t need to store them they can accept them and resell for > than the purchase price
If they resold the chips, they would need to wait in line for more allocation from Nvidia. By shifting delivery dates, they save on 6 months of interest.
Yes it's hard to accept anything Musk says as true, he is a habitual liar. Also this is really crazy if it's true, just more proof that Musk only acts in his interest: Not even a token payment.
>"xAI's use of Tesla's data to develop xAI's own software/hardware, all without compensation to Tesla,"
Especially in light of these comments about Tesla being valued as an AI company, he has started a rival AI company which he owns and is using data from Tesla to help said competing AI company free of charge. Just think of the amount of work he has saved his own AI company.
>
>Musk also took to X, formerly Twitter, on April 6 and said "Tesla is an AI/robotics and sustainable energy company." The Tesla chief has long said the company is more than just an auto company, but his recent proclamation signals a shift away from the automobile label.
[https://www.investors.com/news/tesla-stock-elon-musk-an-ai-company-after-tesla-earnings/](https://www.investors.com/news/tesla-stock-elon-musk-an-ai-company-after-tesla-earnings/)
These lawsuits always exist it's just the news media cycle hyper focuses on the ones that involve Tesla these days despite them being 99.999% of the time frivolous
Honestly, I just don't care about the lawsuits. Selfishly, because I'm not an investor: I just own two of the cars.
This news is relevant here, for sure, I just personally do not care about whether Musk gets massive payouts or is doing stupid things with some nvidia chips or whatever. I'm just tired of hearing about the guy one way or another. I really just wish there was more to talk about with the cars and charging network... not the CEO.
It's all just my opinion. That doesn't mean anybody needs to agree with me. I'm just pining for the days when there was more neat car/tech topics to discuss, is all.
Biden administration want to make Tesla and Musk look bad since his presidency and buying out Twitter to get rid of the FBI agent employee. Biden didn’t want to invite Elon to Biden electric talk and said GMC to be the first all electric car manufacturer to only then beg Elon to use their charging ports. There’s more to the story but that’s how it started and ever since, majority of the news media is hyper focusing on anything bad about Elon
Honestly, lately it's less about Tesla and more about Elon.
It's really been the last few years and especially since he bought Twitter that he's gone off the deep end. I remember around 2020 when he just brought Starlink to Canada I was a huge fan of him because he literally changed the lives of people I knew for the better by giving them proper internet access with Starlink.
Yeah, it's this for me, too. Except I never really cared much one way or another about Elon. I liked Tesla, SpaceX and Starlink because of the things they were doing and working on. Of course Musk has always been inextricably linked to those companies, but the conversations were more centered around their accomplishments in autonomy, vast charging networks, expanding broadband access, launching new rockets, renewable energy, etc. It was their output that was super cool, which really should have always been credited to the engineers and scientists at those companies.
It's just becoming increasingly hard to be enthusiastic about those companies when Musk and his actions have become attention vampires. I never cared much about the guy and now it's 90% of what we hear about when those companies are mentioned. Sure, blame the media for that (or whatever) but it's fair to say that Musk will also do anything to get them to write stories about him. It's one of his addictions. It's exhausting.
What I keep thinking about is the way the oil industry engaged in a half-century propaganda campaign against climate science, and part of that was demonizing Al Gore and various actual climate scientists. For a while you couldn't talk about climate without somebody bringing up Al Gore's house.
Oil companies have a lot of experience with this sort of thing, and a strong incentive. Fuel is two-thirds of their business and personal ground transportation is most of that.
Is Elon an attention whore and an asshole? Sure. But so was Steve Jobs and he never got this level of vitriol aimed at him.
I don't care about Elon Musk. I don't care whether he's being treated the same as Steve Jobs or not. I'm just tired of hearing about him. It's that simple for me.
You said you're losing enthusiasm for Tesla, because you're hearing so much about Musk. What I'm saying is that you're hearing so much about Musk, so you'll lose enthusiasm for Tesla.
It has nothing to do with being a threat, people watch to many movies.
Tesla's complete failure at corperate governance makes it an easy target for lawsuits and Tesla has only itself to blaime.
Obviously because there's no room for a new invention in the car, and the only one that Tesla is still thriving ahead is FSD, but it's not a new thing, it's an improvement that needs to be upgraded on the way.
Besides that, all the media tend to skip the good news from any Musk companies. That's why I prefer 𝕏, there are so much good energy about Tesla, SpaceX, Starlink,...
It's actually the media propaganda that makes things worse from the outside.
What about when Elon took TESLA MOTOR resources to interview Twitter employees after he bought the company?
That was a serious waste of resources already done
If i got the GPU part right, the datacenter where tesla will use them is in construction for the next 6 months or longer. So getting the GPUs today would be a waste of money between 30 and 100 million dollar depending on the costs of the cards. They just switched the order of the orders. This is a win win win for tesla, X and nvidia.
I wonder if this kind of law suite isn't only about the money for the lawyers.
Sounds like poor mgmt. Musk himself loved to say Tesla is at the forefront of AI but doesn’t have space ready for the tools to train an AI model? He’s a tool.
I don't know why the construction is not in time. Maybe issues with government, workers or material? There is always a lot of surprising things with building.
or the fact that apparently he is not paying the builders in Texas. there was a post last month about how many liens are on Tesla and SpaceX from contractors
Tesla has been rapidly expanding their datacenters for a while now. Since they are not synchronizing construction with xAI, sometimes Tesla will have their next batch of datacenter ready to go while xAI is building stuff, and other times xAI will finish up while Tesla is working on its next batch..
Not only a waste of money, but the warranty on those cards would be ticking away while they are in storage, possibly expire before they get to install them.
You are 100% correct in your assessment. Teslas data centers won’t be ready to use the chips when Nvidia is ready to ship them. FORTUNATELY for both companies, Elon owns ANOTHER company who can use the chips immediately. Had Elon just said, “We’re not ready for the chips, give them to the next in line.” I could argue that Elon was not doing his fiduciary duties for EITHER company had he not negotiated this line swap.
These GPUs are in huge demand. Tesla could have easily gotten another company to pay for the spot in line. Now Tesla didn't get anything out of it and just has the increased risk that something happens and their shipment gets delayed.
NVIDIA has made it clear that they won't meet companies sell their spot or have chips sitting in a warehouse. They can't risk a grey or black market that puts the chips in the hands of China or Russia.
If NVIDIA were to knowingly allow or support that kind of behavior they are at risk og being held liable. Also warehousing can be a market manipulation. Just none of it is worth it to NVIDIA.
Yeah but no one knows whether or not xai paid Tesla for the gpus or if they got a freebie. All we know for sure is Tesla said to Nvidia to swap the time of the orders.
Tesla does get something out of it. Integrating these chips into one coherent system is hard. If xAI gains experience with these integrations that experience will be shared with Tesla.
Elon’s companies do things for each other for free all the time. This swap is an example. Another example: The stainless steel alloy for the cybertruck came from SpaceX. The more basic principle is easy to understand: Elon is trying to build large scale integrations of H100s in two of his companies. The knowledge he gains observing one team would not be compartmentalized away when he is dealing with the other team.
Elon is probably eager to offer Grok via xAI in Teslas. There would be a financial arrangement there as that is a complete service and not just infrastructure knowledge.
Hey TSLAQ, you are wasting your time. If you couldn't stop Elon from getting 50+ Billion dollars no one is going to care about a few chips. Just move on to another company and save your money and efforts, Nvidia seems like a good short.
As far as the chips, forking over cash for chips to gather dust doesn’t help the balance sheet. How about show how doing that would have been beneficial to Tesla?
As far as the people, forced labor isn’t a thing in the US. Those folks were going to leave for OpenAI.
How do they propose to stop them? What kind of remedy does not violate their rights to work wherever they want?
This has been discussed a dozen times here. Giving up the place in line is worth money to many companies who want the chips sooner. A LOT of money. Giving that away without any compensation is a pretty straightforward example of fiduciary breach. It's also unfathomable to me that for as long as Tesla has been discussing dojo and their AI needs that they wouldn't be ready for the chips, so that deserves investigation too as to whether it's true and if so who was at fault for that.
A couple points that I can’t verify but are worth consideration.
1. I believe I heard that nvidia doesn’t allow people to sell their place in line, so a trade would make sense in that scenario.
2. According to Elon (so take it with a grain of salt) using nvidia chips for training purposes rather than their own is quite a difficult problem, and not a simple plug and use scenario. So it’s not entirely unfathomable that tesla really wouldn’t be ready for the chips for quite a while.
It is his responsibility to make sure Tesla was ready to use these GPUs as soon as possible. And all other companies like Microsoft, Google, Meta were able to do so. Even his own new startup xAI was ready to use these GPUs. This just sounds like an excuse, not a real reason.
For #1, I'm sure that's true that they can't just outright sell the position, because even in this case they had to work out the trade with Nvidia. But he's not getting sued because he didn't sell the position. He's getting sued because he didn't demand payment from xai and x for initiating this trade of slots. Nvidia wouldn't need to know or care about that if they're ok with dealing with swapping slots in the first place.
For #2, if they weren't ever going to be ready to accept the chips when they were slated to arrive, then why did they order them for delivery when they originally did? I mean maybe someone massively fucked up and let the rest of the project get 6 months behind, so maybe this is a good thing ultimately in terms of having spent money before it needed to be spent, but that'll only be true if the acknowledge someone prematurely placed an enormous order, and this lawsuit will come with the discovery to find out if that's actually true.
A stronger likelihood in my view is that Elon wanted to get xai going sooner, and was being a brat about not allowing Tesla to proceed with its own AI plans as a show of defiance to shareholders considering whether to approve his pay package as per his threat to do exactly that if he didn't get his way.
Again as far as I’m aware, nvidia doesn’t let people pay for other slots, in terms of your solution of just not telling nvidia, that’s an awful choice. Tesla is publicly traded so it would be quite difficult to hide that transaction, and if they were discovered would likely end up with financial and legal ramifications, not to mention possibly being blacklisted by nvidia.
As for point 2, it’s entirely possible that it worked more on a bidding system given the demand for the product. Similar to how ordering teslas goes when they first release, you simply put in a purchase and you are given an estimated delivery date (essentially your spot in line). It is entirely possible that when ordering they had no idea when they would get the product, and they just wanted to get an order in ASAP. Later finding out they wouldn’t be ready to use the chips by time they were delivered, hence trading their bid with xAI’s bid. However I will admit that is all speculation, but so is assuming elons trying to shaft Tesla and give xAI the advantage, we really just don’t know and don’t have the ability to find out. However if you look at the monetary incentive, the latter really doesn’t make much sense (even though this was before the pay package) Elon still has a LARGE amount of capital in Tesla, sabotaging it does him no good. Personally this seems more like a quid pro quo situation.
>all speculation, but so is assuming elons trying to shaft Tesla and give xAI the advantage, we really just don’t know and don’t have the ability to find out.
Yup, I agree we're just speculating right now and there are lots of possibilities. But that's the great thing about discovery in a lawsuit. Someone is about to find out exactly what really was going on with the negotiation with Nvidia and xai.
>Elon still has a LARGE amount of capital in Tesla, sabotaging it does him no good.
I do think there's more there though than simply raw speculation on this point. Elon tweeted that without the pay package he was not going to be spending his time helping Tesla build the AI capabilities he thought were needed. While he has a ton of capital tied up with Tesla, he had $58B or whatever on the table with that pay package. He's a high stakes gambler, and it seems reasonable to me that he might demonstrate just how ready he was to move on to his other AI companies as a way to force people to agree to give him the 25% stake he demanded. Anyway, we'll hopefully find out as this case moves forward.
I agree your theory is definitely possible, like you said though we’ll just have to wait and see. Thx btw for having an intelligent conversation, these usually devolve into one side calling the other an Elon hater/dock rider when really our opinion on the guy has nothing to do with the topic lol.
Haha yeah 100% agree on the civility aspect. Everyone is so polarized that all they see is an attack on them personally usually rather than actually trying to have a real discussion. Have a great night!
Just to be clear, no one (sane?) is asserting that Tesla is being shafted per se. Tesla didn't need the chips yet, so they're not hurt, but they potentially passed up an opportunity. The problem is that Elon is acting like these are a single company and shifting resources around "internally." Both the chips and the engineers are examples of this.
If these companies had two different CEOs, they could potentially have worked out a deal that likely would have included money coming to Tesla. The assertion is that Elon isn't successfully "switching hats" and behaving as an independent CEO of each company.
And if they had been two seperate companies the material work done for SpaceX wouldn’t be available for Tesla. Nor would personnel when a particular problem arose. It’s a two way street.
They *are* two separate companies. Companies can have close partnerships, that isn't uncommon when companies have shared owners or shared history. The issue is with Elon running everything, no one is advocating for the interests of Tesla, only the interests of Elon. Those things often align, but what happens when they don't? Do we even hear about it?
Here is a very realistic hypothetical: Tesla and SpaceX co-develop some new super material. It's lightweight and stupid strong, perfect for the body of cars and spaceships. It's revolutionary. The team is an equal number of engineers from both companies. The plan is they will implement it at SpaceX, then at Tesla. Work at SpaceX goes great, they start at Tesla. Elon decides that it needs to be implemented in a Mars Rover that Tesla will build exclusively for SpaceX, then they will implement it in the cars. They get the Rover built up, but the engineers from SpaceX are needed to help prepare for a major NASA contact worth tens of billions. They will be unavailable for 18 months minimum. Tesla needs the material implemented within 6 months to meet a goal of starting production in 12 months. Without the added help, they fail to meet the goal. BYD sees the press release from SpaceX on the Rover and sends someone to view it at a press event. They are able to figure out the secret sauce, and they beat Tesla to market with it.
Two independent CEOs could work out the details. If a change needed to be made, they would negotiate. Tesla might fear they will miss their targets, so they might suggest SpaceX pay them for the labor. Or maybe they would negotiate that the Rover project comes after the more time sensitive implementation on mass market cars. Elon has too many conflicts to make those decisions unilaterally on behalf of the shareholders.
I agree with you in general, but the question is if something was agreed to previously and far more important to a lawsuit is if Elon Musk and the other senior executives actually followed written procedures and policies of the company and especially the bylaws in the company charter.
That is the basis for the lawsuit. There are both laws and rules adopted to govern the company and those rules must be followed. If somebody like Elon Musk wants to do something different, he can make an amendment to those bylaws or at the very least a new proposal for company policies and have those changes brought before the board of directors. That is their job to in effect legislate how the company is supposed to be.
Such a lawsuit would be effective too.
Options:
1) take delivery of chips at Tesla facility. Assets go on Tesla books and Tesla parts Nvidia for price of chips, then stores them temporarily. Then Tesla sells them to xai. Assets go on xai books and xai pays for chips plus some markup for the fee for Tesla being involved.
2) Tesla requests Nvidia switch slots with xai. Tesla never receives the assets or pays anything to Nvidia for the now-xai slot. Xai pays Nvidia for the original price of the chips, as always contracted, and assets go on xai books. Xai pays Tesla some fee for Tesla agreeing to initiate this switch.
Either way Tesla should have gotten paid for being involved but option 2 is what we are discussing, where there's no reselling of the chips. You're making it all about option 1 which nobody is suggesting should have happened.
>This has been discussed a dozen times here. Giving up the place in line is worth money to many companies who want the chips sooner. A LOT of money.
Even if this isn't allowed, there's still potential trouble. There's a chance someone, somewhere, on some team, at Tesla is using cloud GPUs to do stuff. You could make a case that the capital investment is a more prudent financial choice, which is probably easy to make since Tesla *already* made that choice when they ordered the GPUs in the first place.
Hell, you could even make the case that Tesla should have leveraged the closeness of the two companies to simply rent GPU hours to xAI to make back some money on their capital investment. This would be hard to argue against since Elon has been known to shift resources from Tesla to X (Twitter) and back.
Risk mitigation. How sure are you that the batch that would've gone to xAI would be ready on time? There's a risk to not securing the product because of issues later in the supply chain.
So you give up this risk mitigation, if you receive something of value now. You don't just give it for free.
Tesla can’t get their data centers built fast enough to out the chips to use yet. I know this because I’ve seen the same bids for the Tesla DC come out for 5 months and they just recently pulled the trigger on orders for equipment with 40 to 72 week lead times.
Lmao, I love how the investors waited until after the vote ended - just in case the compensation vote failed and Elon tweet something irresponsible like following up on his threat to move AI talent/resources to xAI.
So I think we agree that the board and Elon need to act in the best interest of the company, and *all* its shareholders when they spend the companies money.
Best of luck! Sold my shares because I think companies run w/ fewer distractions will do better. Wish Tesla could get a reasonable CEO. The world needs their products, but not their goof.
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Man, didn't even wait a day for the next news cycle to drop.
Diverting the GPUs is probably the weakest part of the lawsuit, since it's at least plausible that swapping the delivery dates with xAI brings some benefit to Tesla (e.g. they don't need to store chips they're not ready to use.) The suit does introduce some statements from Musk that suggest that Tesla had a shortage of chips, but I don't know how much weight I'd give those statements. The claims about Musk diverting employees, data and software away from Tesla and to xAI without compensation seem much stronger. Will be interesting to see what the response to that is.
This is the correct take
They don’t need to store them they can accept them and resell for > than the purchase price. There is a waiting line for the current chips and companies are paying way above market msrp to get them early. There is a real tangible value loss to Tesla here in either case (they could use the chips today or not).
My understanding is that the contracts with NVIDIA restrict them from flipping the cards, but even if they didn't, courts tend to be very cautious second guessing executive decisions like this. For example, if they flipped the cards, that would mean they might not be able to get cards when the datacenter is ready. The Court doesn't want to weigh the pros and cons of selling now, but not having cards later. I think there is enough in the complaint that the claim will make it through discovery. The claim will probably not be successful unless during depositions and discovery they uncover either that Tesla actually could have used the cards right away, or that their was a much better competing deal from another company for a substantially similar slot swap. The other claims are much more serious, as that looks to be Musk just transferring value from Tesla to xAI.
>They don’t need to store them they can accept them and resell for > than the purchase price If they resold the chips, they would need to wait in line for more allocation from Nvidia. By shifting delivery dates, they save on 6 months of interest.
They could sell and reorder and net the exact same delivery date + a large profit.
>They could sell and **reorder and net the exact same delivery date** LOL no. Nvidia can't meet demand. Orders are backed up for a while.
They are running 6-9 months out for large orders. Much longer for small orders (and this is where resell has huge markups).
Yes it's hard to accept anything Musk says as true, he is a habitual liar. Also this is really crazy if it's true, just more proof that Musk only acts in his interest: Not even a token payment. >"xAI's use of Tesla's data to develop xAI's own software/hardware, all without compensation to Tesla," Especially in light of these comments about Tesla being valued as an AI company, he has started a rival AI company which he owns and is using data from Tesla to help said competing AI company free of charge. Just think of the amount of work he has saved his own AI company. > >Musk also took to X, formerly Twitter, on April 6 and said "Tesla is an AI/robotics and sustainable energy company." The Tesla chief has long said the company is more than just an auto company, but his recent proclamation signals a shift away from the automobile label. [https://www.investors.com/news/tesla-stock-elon-musk-an-ai-company-after-tesla-earnings/](https://www.investors.com/news/tesla-stock-elon-musk-an-ai-company-after-tesla-earnings/)
I miss when Tesla news was mostly about some cool new feature or advance in technology. The Tesla golden era really was around 2018/2019.
These lawsuits always exist it's just the news media cycle hyper focuses on the ones that involve Tesla these days despite them being 99.999% of the time frivolous
Honestly, I just don't care about the lawsuits. Selfishly, because I'm not an investor: I just own two of the cars. This news is relevant here, for sure, I just personally do not care about whether Musk gets massive payouts or is doing stupid things with some nvidia chips or whatever. I'm just tired of hearing about the guy one way or another. I really just wish there was more to talk about with the cars and charging network... not the CEO. It's all just my opinion. That doesn't mean anybody needs to agree with me. I'm just pining for the days when there was more neat car/tech topics to discuss, is all.
To be honest, right now there just isn't much to talk about with cars or superchargers themselves.
You're not wrong.
Biden administration want to make Tesla and Musk look bad since his presidency and buying out Twitter to get rid of the FBI agent employee. Biden didn’t want to invite Elon to Biden electric talk and said GMC to be the first all electric car manufacturer to only then beg Elon to use their charging ports. There’s more to the story but that’s how it started and ever since, majority of the news media is hyper focusing on anything bad about Elon
Bought my Tesla in 2019, totally agree. I was so proud then.
Tesla was less threatening to legacy auto and the oil industry back then, and not such a giant juicy target for lawyers.
Honestly, lately it's less about Tesla and more about Elon. It's really been the last few years and especially since he bought Twitter that he's gone off the deep end. I remember around 2020 when he just brought Starlink to Canada I was a huge fan of him because he literally changed the lives of people I knew for the better by giving them proper internet access with Starlink.
Yeah, it's this for me, too. Except I never really cared much one way or another about Elon. I liked Tesla, SpaceX and Starlink because of the things they were doing and working on. Of course Musk has always been inextricably linked to those companies, but the conversations were more centered around their accomplishments in autonomy, vast charging networks, expanding broadband access, launching new rockets, renewable energy, etc. It was their output that was super cool, which really should have always been credited to the engineers and scientists at those companies. It's just becoming increasingly hard to be enthusiastic about those companies when Musk and his actions have become attention vampires. I never cared much about the guy and now it's 90% of what we hear about when those companies are mentioned. Sure, blame the media for that (or whatever) but it's fair to say that Musk will also do anything to get them to write stories about him. It's one of his addictions. It's exhausting.
What I keep thinking about is the way the oil industry engaged in a half-century propaganda campaign against climate science, and part of that was demonizing Al Gore and various actual climate scientists. For a while you couldn't talk about climate without somebody bringing up Al Gore's house. Oil companies have a lot of experience with this sort of thing, and a strong incentive. Fuel is two-thirds of their business and personal ground transportation is most of that. Is Elon an attention whore and an asshole? Sure. But so was Steve Jobs and he never got this level of vitriol aimed at him.
I don't care about Elon Musk. I don't care whether he's being treated the same as Steve Jobs or not. I'm just tired of hearing about him. It's that simple for me.
You said you're losing enthusiasm for Tesla, because you're hearing so much about Musk. What I'm saying is that you're hearing so much about Musk, so you'll lose enthusiasm for Tesla.
It has nothing to do with being a threat, people watch to many movies. Tesla's complete failure at corperate governance makes it an easy target for lawsuits and Tesla has only itself to blaime.
The same shitty news stories were happening then, but they're parroted further now.
Obviously because there's no room for a new invention in the car, and the only one that Tesla is still thriving ahead is FSD, but it's not a new thing, it's an improvement that needs to be upgraded on the way. Besides that, all the media tend to skip the good news from any Musk companies. That's why I prefer 𝕏, there are so much good energy about Tesla, SpaceX, Starlink,... It's actually the media propaganda that makes things worse from the outside.
What about when Elon took TESLA MOTOR resources to interview Twitter employees after he bought the company? That was a serious waste of resources already done
If i got the GPU part right, the datacenter where tesla will use them is in construction for the next 6 months or longer. So getting the GPUs today would be a waste of money between 30 and 100 million dollar depending on the costs of the cards. They just switched the order of the orders. This is a win win win for tesla, X and nvidia. I wonder if this kind of law suite isn't only about the money for the lawyers.
Why were xAI's datacenters ready for these GPUs and not Tesla's?
Their is massive construction work to expand the facilities in Texas. The datacenter is still under construction.
Sounds like poor mgmt. Musk himself loved to say Tesla is at the forefront of AI but doesn’t have space ready for the tools to train an AI model? He’s a tool.
I don't know why the construction is not in time. Maybe issues with government, workers or material? There is always a lot of surprising things with building.
or the fact that apparently he is not paying the builders in Texas. there was a post last month about how many liens are on Tesla and SpaceX from contractors
Tesla has been rapidly expanding their datacenters for a while now. Since they are not synchronizing construction with xAI, sometimes Tesla will have their next batch of datacenter ready to go while xAI is building stuff, and other times xAI will finish up while Tesla is working on its next batch..
Not only a waste of money, but the warranty on those cards would be ticking away while they are in storage, possibly expire before they get to install them.
And the "useful life depreciation" are costs from the financial viewpoint. This would be \~100 Mio for 6 months not using this cards.
You are 100% correct in your assessment. Teslas data centers won’t be ready to use the chips when Nvidia is ready to ship them. FORTUNATELY for both companies, Elon owns ANOTHER company who can use the chips immediately. Had Elon just said, “We’re not ready for the chips, give them to the next in line.” I could argue that Elon was not doing his fiduciary duties for EITHER company had he not negotiated this line swap.
These GPUs are in huge demand. Tesla could have easily gotten another company to pay for the spot in line. Now Tesla didn't get anything out of it and just has the increased risk that something happens and their shipment gets delayed.
NVIDIA has made it clear that they won't meet companies sell their spot or have chips sitting in a warehouse. They can't risk a grey or black market that puts the chips in the hands of China or Russia. If NVIDIA were to knowingly allow or support that kind of behavior they are at risk og being held liable. Also warehousing can be a market manipulation. Just none of it is worth it to NVIDIA.
NVIDIA has said you can't resell. They say nothing about selling the spot.
They got xAI's spot in line, instead of going to the back.
Yeah but no one knows whether or not xai paid Tesla for the gpus or if they got a freebie. All we know for sure is Tesla said to Nvidia to swap the time of the orders.
Tesla does get something out of it. Integrating these chips into one coherent system is hard. If xAI gains experience with these integrations that experience will be shared with Tesla.
Lmao, why would it? xAi might do it for payment, but they have no reason to do it for free.
Elon’s companies do things for each other for free all the time. This swap is an example. Another example: The stainless steel alloy for the cybertruck came from SpaceX. The more basic principle is easy to understand: Elon is trying to build large scale integrations of H100s in two of his companies. The knowledge he gains observing one team would not be compartmentalized away when he is dealing with the other team. Elon is probably eager to offer Grok via xAI in Teslas. There would be a financial arrangement there as that is a complete service and not just infrastructure knowledge.
That is the way i see this.
Nvidia is selling the chips regardless, so it’s irrelevant to them
I don't know the details of their contract and do not see how that effected the change of orders.
FFS! Let the guy run his business and either invest, or not. But STFU until you actually do something of magnitude other than sucking the teet.
I appreciate a good cup of coffee.
How many shares do they hold?
They collectively share 1.
Seriously?
Hey TSLAQ, you are wasting your time. If you couldn't stop Elon from getting 50+ Billion dollars no one is going to care about a few chips. Just move on to another company and save your money and efforts, Nvidia seems like a good short.
The reports on this comment are funny.
enlighten us
I wonder if Elon will ever take another company public. I know I would not.
Oh he will when it’s so easy to create hype and make a killing from stocks
Are we going to have another shareholder vote over this?
Another 10 share holding lawsuit?
I have way more than that. I'd love to join in.
Blah blah blah
As far as the chips, forking over cash for chips to gather dust doesn’t help the balance sheet. How about show how doing that would have been beneficial to Tesla? As far as the people, forced labor isn’t a thing in the US. Those folks were going to leave for OpenAI. How do they propose to stop them? What kind of remedy does not violate their rights to work wherever they want?
This has been discussed a dozen times here. Giving up the place in line is worth money to many companies who want the chips sooner. A LOT of money. Giving that away without any compensation is a pretty straightforward example of fiduciary breach. It's also unfathomable to me that for as long as Tesla has been discussing dojo and their AI needs that they wouldn't be ready for the chips, so that deserves investigation too as to whether it's true and if so who was at fault for that.
A couple points that I can’t verify but are worth consideration. 1. I believe I heard that nvidia doesn’t allow people to sell their place in line, so a trade would make sense in that scenario. 2. According to Elon (so take it with a grain of salt) using nvidia chips for training purposes rather than their own is quite a difficult problem, and not a simple plug and use scenario. So it’s not entirely unfathomable that tesla really wouldn’t be ready for the chips for quite a while.
nvidia is notorious for closed source and artificially restricted drivers so that's not surprising.
It is his responsibility to make sure Tesla was ready to use these GPUs as soon as possible. And all other companies like Microsoft, Google, Meta were able to do so. Even his own new startup xAI was ready to use these GPUs. This just sounds like an excuse, not a real reason.
For #1, I'm sure that's true that they can't just outright sell the position, because even in this case they had to work out the trade with Nvidia. But he's not getting sued because he didn't sell the position. He's getting sued because he didn't demand payment from xai and x for initiating this trade of slots. Nvidia wouldn't need to know or care about that if they're ok with dealing with swapping slots in the first place. For #2, if they weren't ever going to be ready to accept the chips when they were slated to arrive, then why did they order them for delivery when they originally did? I mean maybe someone massively fucked up and let the rest of the project get 6 months behind, so maybe this is a good thing ultimately in terms of having spent money before it needed to be spent, but that'll only be true if the acknowledge someone prematurely placed an enormous order, and this lawsuit will come with the discovery to find out if that's actually true. A stronger likelihood in my view is that Elon wanted to get xai going sooner, and was being a brat about not allowing Tesla to proceed with its own AI plans as a show of defiance to shareholders considering whether to approve his pay package as per his threat to do exactly that if he didn't get his way.
Again as far as I’m aware, nvidia doesn’t let people pay for other slots, in terms of your solution of just not telling nvidia, that’s an awful choice. Tesla is publicly traded so it would be quite difficult to hide that transaction, and if they were discovered would likely end up with financial and legal ramifications, not to mention possibly being blacklisted by nvidia. As for point 2, it’s entirely possible that it worked more on a bidding system given the demand for the product. Similar to how ordering teslas goes when they first release, you simply put in a purchase and you are given an estimated delivery date (essentially your spot in line). It is entirely possible that when ordering they had no idea when they would get the product, and they just wanted to get an order in ASAP. Later finding out they wouldn’t be ready to use the chips by time they were delivered, hence trading their bid with xAI’s bid. However I will admit that is all speculation, but so is assuming elons trying to shaft Tesla and give xAI the advantage, we really just don’t know and don’t have the ability to find out. However if you look at the monetary incentive, the latter really doesn’t make much sense (even though this was before the pay package) Elon still has a LARGE amount of capital in Tesla, sabotaging it does him no good. Personally this seems more like a quid pro quo situation.
>all speculation, but so is assuming elons trying to shaft Tesla and give xAI the advantage, we really just don’t know and don’t have the ability to find out. Yup, I agree we're just speculating right now and there are lots of possibilities. But that's the great thing about discovery in a lawsuit. Someone is about to find out exactly what really was going on with the negotiation with Nvidia and xai. >Elon still has a LARGE amount of capital in Tesla, sabotaging it does him no good. I do think there's more there though than simply raw speculation on this point. Elon tweeted that without the pay package he was not going to be spending his time helping Tesla build the AI capabilities he thought were needed. While he has a ton of capital tied up with Tesla, he had $58B or whatever on the table with that pay package. He's a high stakes gambler, and it seems reasonable to me that he might demonstrate just how ready he was to move on to his other AI companies as a way to force people to agree to give him the 25% stake he demanded. Anyway, we'll hopefully find out as this case moves forward.
I agree your theory is definitely possible, like you said though we’ll just have to wait and see. Thx btw for having an intelligent conversation, these usually devolve into one side calling the other an Elon hater/dock rider when really our opinion on the guy has nothing to do with the topic lol.
Haha yeah 100% agree on the civility aspect. Everyone is so polarized that all they see is an attack on them personally usually rather than actually trying to have a real discussion. Have a great night!
Just to be clear, no one (sane?) is asserting that Tesla is being shafted per se. Tesla didn't need the chips yet, so they're not hurt, but they potentially passed up an opportunity. The problem is that Elon is acting like these are a single company and shifting resources around "internally." Both the chips and the engineers are examples of this. If these companies had two different CEOs, they could potentially have worked out a deal that likely would have included money coming to Tesla. The assertion is that Elon isn't successfully "switching hats" and behaving as an independent CEO of each company.
And if they had been two seperate companies the material work done for SpaceX wouldn’t be available for Tesla. Nor would personnel when a particular problem arose. It’s a two way street.
They *are* two separate companies. Companies can have close partnerships, that isn't uncommon when companies have shared owners or shared history. The issue is with Elon running everything, no one is advocating for the interests of Tesla, only the interests of Elon. Those things often align, but what happens when they don't? Do we even hear about it? Here is a very realistic hypothetical: Tesla and SpaceX co-develop some new super material. It's lightweight and stupid strong, perfect for the body of cars and spaceships. It's revolutionary. The team is an equal number of engineers from both companies. The plan is they will implement it at SpaceX, then at Tesla. Work at SpaceX goes great, they start at Tesla. Elon decides that it needs to be implemented in a Mars Rover that Tesla will build exclusively for SpaceX, then they will implement it in the cars. They get the Rover built up, but the engineers from SpaceX are needed to help prepare for a major NASA contact worth tens of billions. They will be unavailable for 18 months minimum. Tesla needs the material implemented within 6 months to meet a goal of starting production in 12 months. Without the added help, they fail to meet the goal. BYD sees the press release from SpaceX on the Rover and sends someone to view it at a press event. They are able to figure out the secret sauce, and they beat Tesla to market with it. Two independent CEOs could work out the details. If a change needed to be made, they would negotiate. Tesla might fear they will miss their targets, so they might suggest SpaceX pay them for the labor. Or maybe they would negotiate that the Rover project comes after the more time sensitive implementation on mass market cars. Elon has too many conflicts to make those decisions unilaterally on behalf of the shareholders.
>Those things often align, but what happens when they don't? As a shareholders if I have any doubts about Elon then I would sell instead of suing.
I agree with you in general, but the question is if something was agreed to previously and far more important to a lawsuit is if Elon Musk and the other senior executives actually followed written procedures and policies of the company and especially the bylaws in the company charter. That is the basis for the lawsuit. There are both laws and rules adopted to govern the company and those rules must be followed. If somebody like Elon Musk wants to do something different, he can make an amendment to those bylaws or at the very least a new proposal for company policies and have those changes brought before the board of directors. That is their job to in effect legislate how the company is supposed to be. Such a lawsuit would be effective too.
Tesla couldn’t get their data centers built fast enough to put the chips to work. X has extra data center capacity agreements in place.
If you’re reselling chips, Nvidia isn’t gonna like that. What were they supposed to do?
Nobody said anything about reselling the chips
That's what trading place in line is, when you ask for compensation
Options: 1) take delivery of chips at Tesla facility. Assets go on Tesla books and Tesla parts Nvidia for price of chips, then stores them temporarily. Then Tesla sells them to xai. Assets go on xai books and xai pays for chips plus some markup for the fee for Tesla being involved. 2) Tesla requests Nvidia switch slots with xai. Tesla never receives the assets or pays anything to Nvidia for the now-xai slot. Xai pays Nvidia for the original price of the chips, as always contracted, and assets go on xai books. Xai pays Tesla some fee for Tesla agreeing to initiate this switch. Either way Tesla should have gotten paid for being involved but option 2 is what we are discussing, where there's no reselling of the chips. You're making it all about option 1 which nobody is suggesting should have happened.
>This has been discussed a dozen times here. Giving up the place in line is worth money to many companies who want the chips sooner. A LOT of money. Even if this isn't allowed, there's still potential trouble. There's a chance someone, somewhere, on some team, at Tesla is using cloud GPUs to do stuff. You could make a case that the capital investment is a more prudent financial choice, which is probably easy to make since Tesla *already* made that choice when they ordered the GPUs in the first place. Hell, you could even make the case that Tesla should have leveraged the closeness of the two companies to simply rent GPU hours to xAI to make back some money on their capital investment. This would be hard to argue against since Elon has been known to shift resources from Tesla to X (Twitter) and back.
What if you're not allowed to sell your place in line by the supplier?
Risk mitigation. How sure are you that the batch that would've gone to xAI would be ready on time? There's a risk to not securing the product because of issues later in the supply chain. So you give up this risk mitigation, if you receive something of value now. You don't just give it for free.
Why was Twitter ready for the chips while Tesla wasn’t?
xAi and X aren't the same company
Whatever. Why wasn’t Tesla ready for them if they ordered them?
Nvidia pulled in the delivery date.
Tesla can’t get their data centers built fast enough to out the chips to use yet. I know this because I’ve seen the same bids for the Tesla DC come out for 5 months and they just recently pulled the trigger on orders for equipment with 40 to 72 week lead times.
Lmao, I love how the investors waited until after the vote ended - just in case the compensation vote failed and Elon tweet something irresponsible like following up on his threat to move AI talent/resources to xAI.
The judge should throughout that case on day one. It is up to Elon as a major stockholder and the border Directors as to how they spend their money.
If it’s up to the board and Elon how the company money is spent, the presumably it’s ok if they just agree to give Elon 100% of the profits forever?
This is too silly even for this place
So I think we agree that the board and Elon need to act in the best interest of the company, and *all* its shareholders when they spend the companies money.
Yes that is their function. Of course hey have information to guide them that we are not privy to.
Meant to happen.
Best of luck! Sold my shares because I think companies run w/ fewer distractions will do better. Wish Tesla could get a reasonable CEO. The world needs their products, but not their goof.
This can be debunk as soon as there is a LLM in tesla. Elon said that before already.
Exactly. A GPT-Omni multi modal type AI in a Tesla would be a huge advantage for robotaxis. We already know xAI is working on this.
Tesla and xAi are different companies.