Tesla has shut down the Dojo supercomputer project. Who benefits from it?

Tesla has curtailed the development of the Dojo supercomputer, which was supposed to be a competitor to solutions based on Nvidia chips. According to Bloomberg sources, the decision to abandon the bet on its own chips for unmanned technologies was made personally by Tesla CEO Ilon Musk. Instead, the company will rely more on partners.

According to words of Bloomberg's interlocutors, Musk has ordered the Dojo supercomputer project shut down, and development team leader Peter Bannon is leaving Tesla. Dojo has recently lost about 20 engineers to a startup called DensityAI, founded by former Tesla employees. The remaining specialists will be transferred to other projects - mostly related to data centers and computing power, sources said.

Since the beginning of 2024, Musk has been convincing shareholders that Tesla would stop being just a maker of electric cars and transform itself into a leader in artificial intelligence and robotics. A key element of this transformation was to be Dojo, a specialized supercomputer designed to process and train AI models based on the vast amounts of video and other data that Tesla's cars collect. Dojo and another supercomputer called Cortex were intended to improve the driver-assistance system and finally allow Musk to fulfill his promise to remake existing Teslas into robotaxis, notes CNBC.

After abandoning Dojo, Tesla plans to rely more heavily on outside suppliers: developments from Nvidia and AMD will provide computing, while Samsung Electronics will handle chip production, said Bloomberg's interviewees. Tesla and xAI, developer of chatbot Grok, plan to continue buying chips from Nvidia and AMD, said Musk in an interview with CNBC in May 2025.

In July, Tesla signed a $16.5 billion contract with Samsung to supply AI processors through 2033. Samsung's future factory in Texas is to produce the next generation of Tesla's AI6 chip. It will bolster the South Korean tech giant's troubled contract business. But the Samsung deal is unlikely to help Tesla stem the decline in electric car sales or bring robot cabs to market faster, as the chips won't begin production until later, wrote Reuters.

In September 2023, Tesla shares rose 6% in a day on Morgan Stanley's announcement that the Dojo supercomputer could provide nearly $600 billion in capitalization growth. The investment bank then raised its recommendation on Tesla shares from neutral (equal weight) to "above market" (overweight, consistent with a buy recommendation) and replaced Ferrari shares with Tesla securities as its "top investment idea."

The OTC market reacted to the news of Tesla's rejection of Dojo with a decline in quotations: in 24-hour trading on the Robinhood platform, Tesla shares on August 8 slipped in price by 0.6% after increased by 5.7% from Monday through Thursday.

According to data FactSet, 21 stock analysts recommend buying Musk's shares (Buy and Overweight ratings) and the same number advise holding the securities in the portfolio. Nine Wall Street analysts think it is necessary to sell the securities of the world's most expensive electric car maker.

This article was AI-translated and verified by a human editor