Musk and AI Chips, Intel CEO Strikes Back At Nvidia, Meme Madness Twist 6/4/24

David Faber (0:00)

Market Insight and Analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Good Tuesday morning. Welcome to Squawk on the Street. I'm David Faber with Jim Cramer. We're live from Post 9 at the New York Stock Exchange. Carl's on assignment. He's at the CNBC CEO Summit Council, or Council Summit.

Summit Council, Council Summit, that's in DC. Let's give you a look. I'm not sure we have all our boards right now, so we're not gonna be able to look at futures. We'll get them in a second for you. Let's get to our roadmap. It does start with that AI arms race, Nvidia remaining among the best performers on the S&P this year. Apple turns positive, by the way. Cheers for the year. And Morgan Stanley is calling the Worldwide Developers Conference. Apple's having, what, less than a week from now, I guess, a key catalyst.

Plus, there are signs of EV demand recovery, perhaps. Tesla sees its China sales gain, though shares, though, still down 29%. It's not the king in that market, EYD is.

And speaking of, well, what we're keeping an eye on, hey, how about the memes? E-Trade reportedly is considering kicking Roaring Kitties off the platform. His name is Keith Gill.

And he's made a lot of money from being stopped.

Jim Cramer (1:13)

Yeah, good for him.

David Faber (1:15)

Where do we want to start, guys? Do we want to start with the news? All right, let's start with this news involving Elon Musk and AI, in particular, Nvidia chips. Memo's circulated inside Nvidia and obtained by CNBC, show that Elon Musk was telling the chip maker to prioritize shipments of processors to X, the old Twitter, and XAI ahead of Tesla. As you can see, this is a story that's just gone up on cnbc.com.

By ordering Nvidia to let privately held X jump the line ahead of Tesla, Musk pushed back the automakers' receipt of more than $500 million in graphics processing units. Of course, these are the GPUs that are so vital in this generative AI world we're in, and that may push the delivery back for Tesla by months, likely adding to delays in setting up the supercomputer Tesla says it needs to continue to develop its autonomous driving, and not to mention its humanoid robot. So, interesting story here, of course, Jim, and raises those questions that are also central in the story. I invite people to go to the website and read it. About Musk, he's the CEO of Tesla, but obviously controls completely privately held X and XAI.

And if you say, if you sort of deny a benefit for one company and conferred on your private company, you know, is the board signed off on that? I don't know. All of this coming, of course, as there's a vote coming as well on his compensation package that was originally granted to him in 2018, but is being re-voted on.

Jim Cramer (2:52)

Subtle threat.

We lose this, then I lose it, then I'm going to take my bat and ball. You know, this weekend was a very seminal weekend for Elon Musk because Jensen Huang said that Nvidia is by far and away, I'm sorry, that Tesla is by far and away the biggest autonomous because of Nvidia. And I don't know if that'd be the case if Nvidia gave the chips to Musk and he gave them to the other company.

David Faber (3:24)

Yeah, I mean, one of the key paragraphs here in the story, again, Laura Golodny is the reporter. Emails written by Nvidia senior staff and widely shared inside the company suggest that Musk presented an exaggerated picture of Tesla's procurement to shareholders. Correspondence from Nvidia staffers indicates Musk diverted a sizable shipment of AI processors that had been reserved for Tesla to his social media company, X.

Well, you know, again, now, you know, it's funny because Robin Denholm is the chairman of Tesla is making the rounds, as I've said, reported with their institutional investors as they begin the process truly of deciding how they want to vote on the compensation package. A package, by the way, that was passed by some 73% of those same shareholders back in 2018 that obviously awards Mr. Musk a 44 plus billion dollars worth of stock based on the options granted at that time.

Jim Cramer (4:21)

It's a lottery.

David Faber (4:22)

That said, it was agreed to and it was only because he was gonna reach what seemed to be incredibly outsized goals that he did reach. But I wonder if a story like this, you know, this has been a concern in the past.

Jim Cramer (4:35)

Right.

David Faber (4:36)