Quoting the below comments, as they seem to have been missed and need repeating.
You can't just plop them anywhere. You have to have lots of cooling and power available. (And networking.)
As far as why Tesla didn't have room? I seem to recall someone was fired over the GigaTexas expansion, that was to house the datacenter, not being completed on time. So, the plan was for space to be available, but something happened that caused it to not be ready. We don't know why that is. (And I'm not sure Tesla even needs to be sharing that level of detail with the public or shareholders.)
If you have worked in supply chain/logistics this kind of thing goes on constantly, sometimes even between competitors. Everyone is trying to manage cashflow and physical space and *sugar* happens. Suppliers will usually be the go between to negotiate something beneficial to everyone.
Exactly... and this is why the CNBC article is SO wrong. It is because Elon Musk owns these other companies [that can use Nvidia's chips] that Tesla is not calling up Nvidia to say "ummm, remember those chips we ordered? Well, we're not really ready for them yet, go figure out something else to do with them" at which point Nvidia would sell them to someone else. Elon simply said to Nvidia "Tesla isn't ready for them yet, but I know another customer who is." Anyone trying to cast this situation in a negative light misunderstands the relationship between Elon and Jason. Tesla was one of the first high-profile, non-Bitcoin-mining customers of Nvidia's GPUs that was definitely not using them for PC video cards. Tesla selected Nvidia when they decided to move away from Mobileye in 2016. (Tesla already was a long-time customer of Nvidia for the Tegra processors in the MCU1 in 2011) Nvidia remains grateful for the relationship I'm sure adn has no problem shipping the chips to whatever address Elon supplies.
Imagine if General Motors decided to delay/cancel an order. They do not have some other company that needs AI processors. In fact the supply chain problems during COVID [which were nothing to do with the virus] arose specifically because auto manufacturers cancelled a bunch of orders, and then the chip fabs started favouring other types of customers that weren't screwing them around - and then when the auto companies needed chips again, it took them a while to get inventories back to the right levels. Nvidia is happy that Tesla has not been screwing them around cancelling orders.
X was expecting delivery in January. The memo about swapping delivery dates was from December. X was already building out their data center whereas Austin wasn't even close to ready.
12k H100 = 12MW of power (700W per plus balance of plant). Have you seen the additional conduit and cooling towers getting installed? This is not something one just drops into an exsiting building.
The piece is dumb. All that happened is the delivery dates were swapped.
Elon's investment number likely includes vehicle inference (current production and new chip versions), data centers, Dojo, staff, and H100 purchases. Nvidia only has visibility on one of those buckets.
In short:
1) All Elon did was swap delivery dates for NVidia hardware between two companies. Obviously, not theft. The chips were getting made and paid for one way or another...if one company was ready for them sooner, it makes sense to swap delivery dates instead of storing the hardware in a warehouse or trying to cancel/delay the order.
2) This sort of swapping happens often in industry, even between competitors, because it keeps the suppliers happy and stable.
3) You can't just plop the NVidia hardware anywhere and make it work, even if you have empty space somewhere else in the same building. The cluster needs all sorts of electricity and data lines and cooling systems, plus all the shipping and installation logistics. So, if there's a delay in building that infrastructure, the chips can't be used for some time unless an alternate home is found. And this happens often in industry, even between competitors.
4) At least one commenter (quoted above) remembers there being a delay in the construction that got somebody fired. So...perhaps there was a problem or some problem that could have been avoided. Many companies have avoidable problems that eventually get resolved...that's not really news (unless of course the headline can include "Tesla")
5) During COVID, we know that many traditional auto manufacturers cut production and cancelled chip orders. So, the chip manufacturers changed their plans and priorities to provide chips to other customers. When auto manufacturing came back up, the traditional auto manufacturers couldn't get the chips they wanted because they had been de-prioritized by the suppliers. The "troublesome" situation that is being brought up today is actually a good way to keep a supplier (Nvidia) happy and avoid this sort of issue.
If I was going to try to summarize I'd probably write:
"We (Tesla) placed an order for NVidia chips, probably many months or even years in advance due to high demand, because we knew we'd need them for our mission critical project. Then, we continued building our factory and the attached data-center to house and run those chips. A startup AI company, known as X and tied to Twitter/X, also ordered a whole bunch of chips. They happened to be behind us in line for chips...but being tied to Twitter, they might have already had some data center space available. Our factory/data center construction didn't go as quickly as we had hoped, so we (Tesla) swapped line spots with xAI so that they could get chips sooner, and we'd get our chips when we can actually install them instead of having to store them for a few months. Both companies get what they need when the need it, and NVidia as a supplier stays happy too.
Amazing how these things can work out positively for everybody sometimes, and certain media sources will still try to spin it as a problem!"
