Elon Musk warns about an all-out war, and it ‘starts’ with Nvidia

Tesla CEO Elon Musk has raised an alarm over what he calls on impending “all-out war” in artificial intelligence hardware. Musk pointed to Nvidia’s next-generation Blackwell chips as the catalyst for a seismic shift in the industry. This warning from Musk came after investor Gavin Baker discussed that the increasing completion between major AI infrastructure players on the Invest Like the Best podcast. Bake talked about how Nvidia’s Blackwell platform can reshare the economics of AI once fully deployed. Responding to the same on social media platform X (formerly known as Twitter) Musk wrote, “AI is the highest ELO battle ever. Speed of deployment of hardware, especially robotics, is the [linchpin].”

For the unwary, the Elo rating system was originally designed for chess and it is now widely used to rank the performance in esports, sports and even in large language models, underscoring Musk’s view of AI as a high-stakes contest of speed and capability.

Nvidia’s Blackwell delays gave Google on edge

Baker further explained that Nvidia’s transition from Hopper to Blackwell chips was “by far the most complex product transition we’ve ever gone through in technology,” citing challenges like higher power usage, liquid cooling, heavier racks, and heat management. All these delays temporarily gave an advantage to Google as it became the lowest-cost producer of AI ‘tokens’ aggressively cutting prices and squeezing competitors. Baker described Google’s strategy as rational but warned it was “sucking the economic oxygen out of the AI ecosystem.”

Blackwell chips could flip AI economics by 2026

Backer further explained that the first major AI models trained on Blackwell chips are said to come in early 2026, with Musk’s xAI potentially among the first to deploy them at scale. The newer GB300 systems are designed to be “drop-in compatible,” which could make Nvidia-powered AI systems the lowest-cost option in the future.

This shift could force Google to abandon its current low-cost strategy, potentially pressuring its margins and stock performance. Baker warned that sustaining large losses would be “painful” and could reshape competitive behaviour across the AI industry.

Adding to the intensifying battle, Meta Platforms is reportedly in talks to purchase Google’s tensor processing units (TPUs) for its data centers by 2026, with broader deployment planned for 2027. Nvidia, meanwhile, praised Google’s progress but asserted it remains “a generation ahead” of rivals.

Musk’s warning underscores the hardware-centric nature of the AI race, where speed, scale, and cost efficiency will determine winners. With Nvidia’s Blackwell chips poised to redefine AI economics, and Google, Meta, and others vying for dominance, the next two years could mark a turning point in the global AI infrastructure war.