Tesla to streamline its AI chip design work, Musk says

Tesla will streamline its AI chip research to focus on its development of inference chips used to run AI models and make real-time decisions, CEO Elon Musk said, after a media report he had ordered the closure of the in-house Dojo supercomputer team.

Bloomberg News on Thursday cited people familiar with the matter as saying Musk had ordered the Dojo team to be disbanded, with team leader Peter Bannon departing the company.

Tesla did not reply to a Reuters request for comment.


The Dojo supercomputer was designed around custom training chips to process vast amounts of data and video from Tesla EVs to train the automaker's autonomous-driving software.

"It doesn't make sense for Tesla to divide its resources and scale two quite different AI chip designs," Musk said in an X post late on Thursday.

"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," he said, without directly mentioning Dojo.

Morgan Stanley analysts led by Adam Jonas valued the Dojo supercomputer at $500 billion in 2023, saying it opened a new market for the automaker beyond cars sales, similar to how Amazon's cloud unit boosts profit for the ecommerce firm.

"Dojo is the key accelerant at the intersection of hardware and software," the brokerage said on August 4. Jonas did not immediately respond to a query if the latest development would hurt Tesla's valuation.

Tech companies are increasingly designing custom chips to cut latency, power and cost, while consolidating around fewer architectures.

Tesla has been restructuring over the past year, with its share price slumping as sales of its EVs were hit by rising competition and a backlash by European consumers in particular against Musk's political views.

The company has seen multiple executive departures and 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.

Musk has said next-generation AI5 chips would be produced at the end of 2026 and last month announced a $16.5 billion deal to source AI6 chips from Samsung Electronics, without providing a production timeline.

He has said future AI inference chips, including AI6, would be deployed in self-driving vehicles and its Optimus humanoid robots, though he has noted the substantial computing power could enable broader AI applications.

The Dojo team recently lost about 20 workers to newly-formed DensityAI, and the remaining workers are being reassigned to other data center and compute projects within Tesla, the Bloomberg report said.