Elon Musk recently responded to a news report alleging that he redirected Nvidia H100 GPUs that were intended for Tesla to X and xAI. In his response, Musk noted that Tesla did not have the space for the GPUs yet, so instead of placing them in a warehouse for storage while waiting for Giga Texas’ extension to be completed, they were used for X and xAI. He also assured that Giga Texas’ south extension will house 50,000 Nvidia H100 GPUs for FSD training.
In light of the reports, Morgan Stanley analyst Adam Jonas noted that Tesla shareholders may really need to be prepared for the prospect of the electric vehicle maker slowing down its AI efforts if Elon Musk fails to achieve a 25% voting stake in the company. These AI efforts, the Morgan Stanley analyst noted, may be focused on non-Tesla entities where Musk has control.
That being said, Jonas also noted that even if TSLA investors do not vote to ratify Elon Musk’s 2018 CEO Performance Award, there may be a number of paths that Musk could take so he can achieve a 25% voting stake in the electric vehicle maker, at least over time. Such a scenario, of course, assumes that Musk would stay on as CEO of Tesla even if his work since 2018 remained essentially unpaid.
Morgan Stanley's Adam Jonas has released a new $TSLA note: "Without Elon Musk achieving a 25% voting stake in the company, we believe Tesla shareholders should be prepared for Tesla to significantly slow down/curtail its direct investment in sensitive/advanced AI efforts.
— Sawyer Merritt (@SawyerMerritt) June 4, 2024
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Following are the Morgan Stanley analyst’s thoughts about Tesla’s AI efforts and Elon Musk.
“Without Elon Musk achieving a 25% voting stake in the company, we believe Tesla shareholders should be prepared for Tesla to significantly slow down/curtail its direct investment in sensitive/advanced Al efforts.
“Per the 4Q23 earnings call, when asked why he is uncomfortable expanding Al and robotics at Tesla without 25% of voting share, Mr. Musk said: ‘I see a path to creating an artificial intelligence and robotics juggernaut of truly immense capability and power… I’m not looking for additional economics. I just want to be an effective steward of very powerful technology.’
“While Tesla may still be in a position to benefit indirectly from Al advancements, we believe that most of the adjacent Al efforts could be concentrated within non-Tesla entities where Elon Musk has control (in the event Mr. Musk does not reach a 25% voting share of Tesla).
“While investor opinions around the June 13th shareholder vote are in flux, we believe there may be any number of potential paths for Elon Musk to achieve a 25% voting stake in Tesla (over time) even without the inclusion of the 2018 compensation package.“
Tesla is expected to hold its 2024 Annual Stockholders’ Meeting, also known as the 2024 Cyber Roundup, on June 13, 2024 at Giga Texas. The event, similar to Tesla’s other key meetings, would be live-streamed.
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