Elon Musk has reportedly invested approximately $10 billion in artificial intelligence computing capabilities for Tesla and xAI in 2024, according to Tesla investor Sawyer Merritt. This substantial investment reflects Musk’s ambition to lead the AI race, though it faces stiff competition from industry giants like Microsoft, OpenAI, and Google.
Tesla’s AI initiatives are centered around its Full Self-Driving system and involve massive deployments of Nvidia H100 GPUs. At Giga Texas, a 29,000-unit H100 cluster is already operational and exceeding training schedule expectations. This cluster is projected to expand to 50,000 H100s by the end of October and reach an equivalent of approximately 85,000 H100s by December. Tesla also unveiled its Cortex AI cluster in August, utilizing 50,000 H100 GPUs alongside 20,000 of Tesla’s proprietary Dojo AI chips. Additionally, the Colossus supercomputer, revealed in September, matches the H100 count of the Memphis supercomputer and is slated for further expansion with 50,000 H100 and 50,000 H200 GPUs.
Elon Musk at Tesla Cyber Rodeo.
xAI, Musk’s dedicated AI company, is focused on developing advanced AI models. Their flagship project, the Memphis supercomputer housed in a repurposed Electrolux facility in Memphis, Tennessee, boasts 100,000 Nvidia H100 GPUs, making it arguably the most powerful AI training cluster globally. Musk intends to double this capacity soon. Operational since September, Memphis aims to create the “world’s most powerful AI” by December, potentially Grok 3. While xAI hasn’t disclosed Memphis’s total cost, estimates suggest at least $2 billion has been spent on GPUs alone.
The $10 billion investment is half of what Musk initially projected Tesla would spend on AI compute this year. He previously stated that any company not investing at a similar level and with comparable efficiency would struggle to compete. However, competitors like OpenAI are also investing heavily, with estimated expenditures around $7 billion on AI compute and a recent funding round securing $6.6 billion.
Microsoft and Meta are also aggressively expanding their AI infrastructure. Microsoft’s quarterly capital expenditure now rivals its pre-2020 annual spending, exceeding $20 billion in Q1 2024 with further increases expected. Meta’s quarterly spending in 2024 matches its annual expenditure until 2017. Google’s capital expenditures reached $13 billion in Q3 2024, a 63% year-over-year increase, with a total of $38 billion invested in compute infrastructure year-to-date, an 80% surge from the previous year. These figures highlight the intense competition and massive investments driving the current AI landscape, making Musk’s $10 billion investment a significant but not unparalleled commitment.
In conclusion, while Musk’s investment in AI compute is substantial, it’s becoming increasingly clear that maintaining a competitive edge in the rapidly evolving AI landscape requires massive financial commitments. The race for AI dominance is heating up, with major players pouring billions into research and infrastructure, setting the stage for continued breakthroughs and fierce competition in the years to come.
