Tesla CEO Elon Musk announced that the company would simplify its research on AI chips in order to concentrate on creating inference chips that can run AI models and make decisions in real time. This comes after a media report claimed that Musk had ordered the shutdown of the company’s Dojo supercomputer team.
According to people familiar with the situation who were quoted by Bloomberg News, team leader Peter Bannon left the company after Musk ordered the dissolution of the Dojo team.
In order to process massive volumes of data and video from Tesla Electric Vehicles and train the automaker’s autonomous-driving software, the Dojo supercomputer was built around specially made training chips.
“It doesn’t make sense for Tesla to divide its resources and scale two quite different AI chip designs. The Tesla AI5, AI6 and subsequent chips will be excellent for inference and at least pretty good for training. All effort is focused on that,” Elon Musk said in an X (formerly Twitter) post, without directly mentioning Dojo.
Throughout 2024, Tesla has undergone extensive restructuring, and its share price has fallen as sales of its electric vehicles have been negatively impacted by increased competition and a backlash against Musk’s political beliefs from European consumers in particular.
In addition to laying off thousands of workers and losing several executives, the company has shifted its emphasis to robotics and AI-driven self-driving technology, and Elon Musk is working to integrate his tech empire. Without mentioning a production schedule, Musk previously stated that next-generation AI5 chips would be manufactured by the end of 2026.
Recently, he announced a USD 16.5 billion agreement to purchase AI6 chips from Samsung Electronics. The maverick tech boss further stated that self-driving cars and their Optimus humanoid robots will use AI inference chips in the future, including AI6, but he has also pointed out that the significant processing power may allow for more extensive AI applications.
About 20 employees of the Dojo team recently left for the recently established DensityAI, and the remaining employees are being moved to other data centre and compute projects at Tesla. Morgan Stanley analysts led by Adam Jonas valued the Dojo supercomputer at USD 500 billion in 2023, saying it opened a new market for the automaker beyond car sales, similar to how Amazon’s cloud unit boosts profit for the e-commerce firm.
However, Elon Musk’s latest announcement comes at a time when tech companies are increasingly designing custom chips to cut latency, power and cost, while consolidating around fewer architectures.
Talking about Tesla, amid its restructuring drive since 2024, the share price has slumped as sales of the auto behemoth’s electric vehicles are being hit by rising competition, amid a backlash by European consumers in particular against Musk’s political views.
The company has seen multiple executive departures, cut thousands of jobs, and redirected its focus to AI-driven self-driving technology and robotics, with Musk pursuing an integration strategy across his tech business empire.