Elon Musk confirms ongoing chip purchases from Nvidia and AMD for Tesla and xAI

In the United States, Elon Musk announced that Tesla and his artificial intelligence company, xAI, will continue their procurement of chips from major semiconductor manufacturers, including Nvidia and AMD. This statement was made during an interview on May 20, 2025, with CNBC's David Faber. Musk highlighted that xAI has already installed 200,000 GPUs at its facility known as Colossus in Memphis, Tennessee, which is a significant development for the company as it tries to establish itself at the forefront of AI technology. Additionally, Musk shared plans for building a new facility housing one million GPUs outside of Memphis, aiming to further enhance the capabilities of xAI. Musk’s predictions regarding the limitations posed by chip availability on AI developments have gained attention. He has previously emphasized the importance of hardware resources in advancing artificial intelligence technologies. Notably, Musk had instructed Nvidia last year to prioritize xAI's GPU orders, indicating a strategic focus on ensuring that his AI company has an ample supply of the necessary computational power to compete effectively in the AI landscape. Tesla’s Dojo supercomputer, located in Buffalo, New York, is also already operational and serves to train Tesla's Autopilot and robotics systems. The ongoing expansion of xAI is seen as a transformative investment for the Memphis area, which local officials hope will develop into a high-tech manufacturing hub. However, this growth has not come without controversy. Local communities have raised concerns about the environmental impact, specifically regarding the reliance on natural gas-burning turbines to power the supercomputer. The emissions from these turbines, including nitrogen oxides that contribute to smog, have led to heightened scrutiny regarding the health implications for surrounding residents. As xAI moves forward with its ambitious plans, balancing technological advancement with community and environmental health will be crucial for its long-term success. Overall, Musk's announcement underscores the competitive landscape of AI, where companies are increasingly reliant on advanced chip technology to fuel innovation. By securing partnerships with established semiconductor firms like Nvidia and AMD, both Tesla and xAI are positioning themselves for future growth, but the implications of their power consumption and environmental practices will remain significant factors as they forge ahead.