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Tesla (NASDAQ:TSLA) traded higher on Monday as investors and analysts weighed the impact of the company dismantling its Dojo supercomputer team
Elon Musk confirmed the development over the weekend after Bloomberg originally broke the story.
“Once it became clear that all paths converged to AI6, I had to shut down Dojo and make some tough personnel choices, as Dojo 2 was now an evolutionary dead end,” Musk wrote on social media site X. He noted that Dojo 3 arguably lives on in the form of a large number of AI6 SoCs on a single board.
Musk described the Dojo initiative as a high-risk, high-payoff effort.
Dojo was formally unveiled during Tesla’s (NASDAQ:TSLA) first AI Day in 2021, with plans for the custom D1 chip to be engineered specifically for AI workloads. Musk highlighted plans for massive scale, with an “Exapod” cluster containing thousands of D1 chips. Later on, Dojo was again highlighted as Tesla’s (NASDAQ:TSLA) overarching in-house AI supercomputer platform, with a target to accelerate the training of neural networks for Full Self-Driving and other artificial intelligence projects such as the Optimus humanoid robot.
The decision to end the Dojo program is seen by analysts as an incremental positive for Nvidia (NVDA) and AMD (AMD).
Morgan Stanley analyst Adam Jonas pointed out that Tesla (TSLA) could see some notable capex and opex spending relief from the decision to exit Dojo computer development. He also sees Musk synergies developing. “A potential scaling back/elimination of Dojo could increase the rationale for further cooperation between Tesla and xAI,” wrote Jonas. Of note, xAI continues to expand its AI capabilities, training on data from X (formerly known as Twitter) as well as real-world vision data from TSLA, observed Jonas.
Shares of Tesla (TSLA) were up 4.4% in Monday trading.