Elon Musk said he expects Tesla and his artificial intelligence firm, xAI, to keep buying computer chips from Nvidia and AMD, and possibly from other suppliers.
Musk’s AI company, xAI, which now owns X (formerly Twitter), has already set up 200,000 graphics processing units, or GPUs, at its Colossus facility in Memphis. According to a CNBC report, on Tuesday, he also said xAI plans a larger site, with 1 million GPUs, just outside Memphis.
He did not say exactly how many chips xAI has ordered so far or when they will be installed. “A few years ago, I made a very obvious prediction, which is that the limitation on AI will be chips,” he said.
Last year, Musk moved to speed up deliveries of GPUs to xAI when he told Nvidia to send a large order there first, ahead of Tesla. At Tesla, Musk said the company’s Dojo supercomputer in Buffalo, New York is already being used to train its Autopilot system for cars and its Optimus robotics projects.
Musk boasted that xAI’s Colossus cluster is the “most powerful training cluster in the world right now,” with “over 200,000 GPUs training coherently.” City officials praised his choice to build in Memphis for turning the area into a “high-tech manufacturing hub.”
Pollution fears over gas turbines powering xAI’s 200,000 GPUs
Some people near the site have protested the power- and water-hungry operation. They point to xAI’s use of natural gas–burning turbines to run the computers. Those turbines give off smog-forming nitrogen oxides (NOx), which can lead to ozone and have been linked to a higher risk of death from lung disease.
Environmental advocates say xAI has likely “violated the Clean Air Act” and failed to meet local permit rules for “major sources of air pollution.” They want officials to review the company’s turbines and the rules that govern them.
Nvidia leads the global chip market
Bloomberg reported that Nvidia controls about 90 percent of the data-center GPU market, far outpacing all rivals, according to IDC.
Nvidia’s chief executive, Jensen Huang, opened Asia’s major tech gathering, Computex, in Taiwan this week. He focused on boosting product performance and reinforcing Nvidia’s place as a leading competitor in the global chip and computing market.
Huang gave an update on Nvidia’s ecosystem work, highlighting its upgraded accelerator chips that power and scale AI applications.
Advanced Micro Devices Inc., Nvidia’s main rival in AI chips, has continued to lag behind. As of May 20, 2025, AMD shares were trading at $113.59, down roughly 23% from their December 29, 2023 closing price of $147.41.
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