Nvidia vs. AMD: Elon Musk Picked a Side on the SpaceX Earnings Call

Nvidia and Advanced Micro Devices (AMD) dominate the GPU market. Nvidia is shipping Blackwell at a massive scale and developing Vera Rubin for the next rack-scale platform. AMD, meanwhile, is selling MI300 systems and preparing MI400 accelerators to maintain its market position. Major tech companies like Amazon, Alphabet, Microsoft, Oracle, Meta, Anthropic, and OpenAI utilize chips from both Nvidia and AMD for AI initiatives due to supply constraints, varied workloads, and budget limitations.

Elon Musk, during SpaceX's first earnings call as a public company, declared an allegiance to Nvidia, citing the Vera Rubin architecture as the superior choice for AI computing. Musk emphasized the strong partnership and cooperation between SpaceX, Tesla, and Nvidia, suggesting that Tesla also relies on Nvidia's hardware for its autonomy stack.

This decision is not surprising, considering Tesla's past reliance on Nvidia chips while developing its own inference processors. SpaceX utilizes GPU clusters for various applications, including orbital data centers, Starlink integration, Starship mission planning, and autonomous vehicle simulations. The company is also leasing large clusters of Nvidia compute instead of retaining the chips solely for training its generative model, Grok.

Anthropic, a leading AI company, has a $1.25 billion monthly cloud services agreement with SpaceX, granting access to compute capacity across SpaceX's supercomputers, Colossus and Colossus II, featuring approximately 325,000 Nvidia GPUs. Google Cloud has committed $920 million monthly for access to roughly 110,000 Nvidia GPUs, CPUs, memory, and networking kits through 2029.

Reflection AI has signed a multiyear deal worth up to $6.3 billion to access Nvidia GB300 chips at a reported $150 million per month. Despite AMD's strong growth, it lags far behind Nvidia in terms of market cap, valuation, and overall size. Nvidia's market cap reaches around $5.3 trillion, while AMD's valuation sits at about $830 billion.

Nvidia's data center revenue for the second quarter was $89 billion, increasing by 117% year-over-year. AMD's data center sales grew by 107% year-over-year, reaching $6.7 billion. While AMD demonstrates impressive growth, it remains a relatively small player compared to Nvidia. The AI landscape continues to evolve, with hyperscalers maintaining dual-sourcing strategies and the upcoming MI400 design wins.

However, Elon Musk's unwavering commitment to Nvidia for SpaceX, Tesla, and related ventures solidifies his loyalty to the established leader in the chip industry.