What To Know
- In a surprising move, Tesla is disbanding its Dojo team, its leader is out, and the company is leaning hard on outside tech giants to fuel its AI ambitions.
- He even called Dojo a “long shot” back in January 2024, saying Tesla was also leaning on Nvidia as a backup plan.
- Dojo was Tesla’s ticket to owning its AI destiny, giving it a competitive edge in a world where self-driving tech is the holy grail.
Imagine pouring years into building a high-tech supercomputer to power your self-driving cars and futuristic robots, only to hit pause and pivot to a new playbook. That’s exactly what Tesla’s doing with its Dojo supercomputer project, and the tech world is buzzing. In a surprising move, Tesla is disbanding its Dojo team, its leader is out, and the company is leaning hard on outside tech giants to fuel its AI ambitions. So, what’s behind this shake-up, and what does it mean for Tesla’s future? Let’s dive in and unpack this story like we’re chatting over a burger at your favorite diner.
Tesla’s Dojo was billed as the brains behind its push for artificial intelligence supremacy. Designed to crunch massive amounts of video data from Tesla vehicles, the supercomputer—powered by a custom-built D1 chip—was meant to supercharge the algorithms for Autopilot, Full Self-Driving (FSD), and even the Optimus humanoid robot. Wall Street was all in: Morgan Stanley analysts once predicted Dojo could add a jaw-dropping $500 billion to Tesla’s market value. That’s the kind of money that could buy a fleet of Cybertrucks and still have change for a few Super Bowl ads.
But in a twist nobody saw coming, Tesla CEO Elon Musk has called it quits on the Dojo team. According to sources close to the matter, Musk has ordered the project to wind down, and Peter Bannon, the engineer leading the charge, is leaving the company. About 20 Dojo team members have already jumped ship to DensityAI, a new startup founded by former Dojo chief Ganesh Venkataramanan and ex-Tesla engineers Bill Chang and Ben Floering. The rest of the crew? They’re being reassigned to other Tesla projects, like data centers and computing tasks. It’s like breaking up a championship team mid-season and sending the players to different leagues.
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So, why the sudden change of heart? Tesla’s betting big on partnerships with industry heavyweights like Nvidia, AMD, and Samsung instead of going it alone. Think of it like trading your home-cooked chili recipe for a partnership with a Michelin-starred chef. Just last month, Tesla signed a $16.5 billion deal with Samsung to supply AI chips through 2033, with a new Texas plant set to produce Tesla’s next-generation AI6 chip. This move diversifies Tesla’s chip supply beyond Taiwan Semiconductor, a smart play in today’s chip-hungry world.
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Musk himself confirmed the shift on X, posting that Tesla’s next AI chips will be “excellent for inference and at least pretty good for training.” Translation: they’ll rock at running AI models and hold their own when it comes to teaching them new tricks. During Tesla’s July 23 earnings call, Musk hinted at this pivot, suggesting future Dojo tech might blend with partner chips—like mixing your go-to playlist with a friend’s new tracks. He even called Dojo a “long shot” back in January 2024, saying Tesla was also leaning on Nvidia as a backup plan. “It’s a high-risk, high-reward bet,” Musk said, sounding like a Vegas gambler weighing the odds.
This shake-up comes at a rough moment for Tesla. The company’s stock slid 0.7% before Friday’s opening bell in New York, adding to a 20% drop this year—tough news for investors already rattled by falling EV sales and rising competition from brands like Rivian and BYD. Tesla’s also been hit by a talent drain, with key players like Milan Kovac (head of Optimus engineering), David Lau (software engineering VP), and Musk’s longtime ally Omead Afshar leaving in 2025. Add in some consumer pushback over Musk’s political stances, and it’s clear Tesla is navigating a bumpy road.
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What’s the bigger picture? Dojo was Tesla’s ticket to owning its AI destiny, giving it a competitive edge in a world where self-driving tech is the holy grail. By outsourcing to Nvidia and AMD, Tesla might move faster, but could lose some of that homegrown magic. “Tesla’s decision to lean on external partners reflects a pragmatic shift,” says tech analyst Sarah Johnson of Wedbush Securities. “It’s about speed and scale, but it risks diluting Tesla’s unique edge in AI innovation.”
Meanwhile, DensityAI is emerging as a player to watch. The startup, set to step out of stealth mode soon, is building chips, hardware, and software for AI data centers—not just for cars but for robotics and beyond. It’s like the Dojo team took their playbook and started a new game, and they might just score big.
For American drivers dreaming of fully autonomous Teslas or investors banking on the company’s AI prowess, this news is a wake-up call. Tesla’s still in the race, but it’s swapping its custom ride for a co-pilot. Will it pay off? Only time will tell, but one thing’s clear: in the fast-moving world of AI, Tesla’s not afraid to shake things up. Stay tuned—this road trip’s just getting started.
Source by Bloomberg
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