Elon Musk caps Tesla staff’s AI spending

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Elon Musk

Elon Musk said earlier this year that AI would allow 'output' per Tesla worker to get 'nutty high' - Robyn Beck/Pool Photo via AP

Elon Musk has capped Tesla employees' spending on AI at $200 (£150) a week as companies seek to rein in runaway bills.

Staff at the electric vehicle manufacturer have been told that their use of the technology will be limited from Monday.

The cap does not apply to Grok, Mr Musk's own AI system, which has struggled compared to rivals such as Anthropic's Claude, ChatGPT and Google's Gemini.

Many large companies have pushed their employees to use AI as much as possible hoping it will make them more productive.

Mr Musk said earlier this year that AI would allow "output" per Tesla worker to get "nutty high".

But the push to use AI has led to soaring bills, as the cost of using these systems rises with demand. There are fears that staff are also wastefully using AI to carry out menial tasks in an attempt to demonstrate they are using it.

Several companies are now seeking to rein in staff use. Uber, which had told employees to use AI as much as possible, recently limited usage to $1,500 per month, while Meta, Walmart and Coinbase have all said they will introduce caps.

Capping spending could force staff to use AI only for important tasks or encourage them to use cheaper AI systems.

Tesla's $200-a-week cap was first reported by the tech news website The Information. Staff will need to receive special permission to go above the limit.

The limits mark an about-turn from the "tokenmaxxing" trends in which staff were measured by how many tokens, a unit of AI usage, they were consuming.

A pull-back on corporate AI usage has stoked fears of a potential stock market crash. Heavy spending on AI infrastructure by labs has helped propel markets to new heights, but this investment is predicated on rapid adoption of the technology.

Responding to a message on X earlier this week predicting an imminent tech crash, Mr Musk wrote: "There are always momentary dips, even in a rapidly growing economy. The productivity gains from AI and robotics are so enormous, however, that the macro trend is overwhelmingly up."

Mr Musk's own AI company xAI, which is owned by SpaceX, has struggled to match rival chatbots, especially when it comes to the coding tasks that Claude and ChatGPT are widely used for. The billionaire has said the system needs to be "rebuilt from the ground up".

SpaceX recently agreed to acquire AI coding start-up Cursor for $60bn. The company has its own AI system, Composer, which Mr Musk has encouraged Tesla staff to use.

Mr Musk is determined to make Tesla an AI leader through its use of driverless car technology and the company's Optimus robots. The push to take advantage of the technology comes amid growing competition for its EVs from cheap Chinese electric cars.