Elon Musk: Tesla Will Simplify AI Chip Research

Tesla CEO Elon Musk (photo: x @ElonMuskDRGSS ·)

JAKARTA - Tesla will simplify its AI chip research to focus on developing inference chips that are used to run AI models and make decisions in real-time. This was said by Tesla CEO Elon Musk, following media reports that he had ordered the disbandment of the internal Dojo supercomputer team.

According to Bloomberg News on Thursday, August 7, Musk has ordered the Dojo team to be disbanded, with team leader Peter Bannon, leaving the company.

Dojo's supercomputer is designed with a dedicated training chip to process huge amounts of data and video from Tesla's electric vehicles to train the company's autonomous driving software.

"It doesn't make sense for Tesla to share resources and scale for two very different AI chip designs," Musk said in a post on X on Thursday night.

"The next AI5, AI6, and chip chips will be excellent for inference and at least good enough for training. All efforts are focused on that," he said, without directly mentioning Dojo.

Morgan Stanley analyst led by Adam Jonas assesses Dojo's supercomputer worth $500 billion in 2023, stating that it opens up a new market for automakers beyond car sales, similar to how Amazon's cloud unit increased the e-commerce company's profits.

"Dojo is the main accelerator at hardware and software intersections," he said on August 4. Jonas has not yet responded to the question of whether these latest developments will affect Tesla's valuation.

Tech companies are increasingly designing specialized chips to reduce latency, power and cost, while consolidating less architecture.

Tesla has been restructuring over the past year, as its share price slumped as sales of its electric vehicles were hit hard by growing competition and negative reactions from European consumers to Musk's political views.

The company is experiencing several executive departures and cutting thousands of jobs, as well as shifting its focus on AI-based autonomous driving technology and robotics, with Musk pursuing integration strategies across its tech business empire.

Musk said the next-generation AI5 chip would be produced by the end of 2026 and last month announced a $16.5 billion deal to supply Samsung Electronics' AI6 chip, without providing a production schedule.

Musk said the future AI inference chip, including AI6, would be used on autonomous vehicles and humanoidal robots, although he noted that great computing power could enable wider AI applications.

According to a Bloomberg report, Dojo's team recently lost about 20 workers joining the newly formed DensityAI, and the remaining workers were transferred to other data center and computing projects within Tesla.