Musk emphasised that chip availability is currently the primary constraint in AI development, a prediction he made years ago. However, he foresees the limiting factor shifting to electrical infrastructure, warning of an impending electricity shortage for AI companies by mid-2026.
Also Read: What’s so funny about Vishal Mega Mart security guard job listing?Musk stated that Tesla’s Dojo supercomputer in Buffalo, New York, is actively used to train Autopilot and Optimus robotics systems. Meanwhile, at xAI, he described Colossus as the “most powerful training cluster in the world right now,” with “over 200,000 GPUs training coherently.”
Musk stated that chips are currently the biggest constraint on AI development, but he predicts that soon, the limitation will shift to electrical equipment, leading to a “fundamental electricity generation shortage” for AI companies by mid-2026.He noted that China’s investments in power generation exceed those of the US, but emphasised that the US still holds an “advantage in breakthrough innovation.”
“I think it’s somewhat of a cultural thing, which is that to have breakthrough innovation you have to question authority,” Musk explained. “Fundamentally, you’re questioning the conventional wisdom when you do a breakthrough innovation.” In contrast, he said, “People in China don’t generally like to question authority.”
Faber asked whether xAI and Tesla might merge, a concept frequently discussed by Musk’s supporters who see his companies as part of the broader “Muskonomy.”
Musk responded that while it’s not something he’s actively considering, “It’s not out of the question,” adding that any merger would “obviously require Tesla shareholders’ support.”
Tesla and xAI already collaborate, with Tesla’s recent financial filings revealing that xAI spent $191 million in 2024 and $36.8 million through February 2025 on Tesla Megapacks—utility-scale energy storage systems.
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