Shares of electric vehicle maker Tesla (TSLA) gained 2.3% on August 8, despite news of the disbanding of the entire Dojo supercomputer team. The team was built to focus on developing Tesla’s in-house artificial intelligence (AI) chips to power its self-driving technology and Optimus humanoid robot. The closure of the Dojo project means Tesla will now have to rely on sourcing chips from tech companies, such as Nvidia (NVDA), AMD (AMD), and Samsung (SSNLF).
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However, the news was not all bad, since CEO Elon Musk quickly clarified that Tesla’s AI5 and AI6 chips will take over the role of the Dojo team. Investors reacted positively, driving TSLA stock higher on Friday. Musk explained the shift in an X post, saying, “It doesn’t make sense for Tesla to divide its resources and scale two quite different AI chip designs.”
AI6 Is the New Dojo
Following Musk’s post, a Tesla enthusiast cheered the shift, saying, “AI6 is the new Dojo.” Tesla has stopped its separate Project Dojo supercomputer initiative to focus entirely on its in-house AI5 and AI6 chips. Musk stated that, instead of maintaining two different AI chip designs, Tesla will use its AI5 and AI6 chips both for training and inference of its autonomous driving systems, such as Full Self-Driving (FSD) and Autopilot. These chips will also be used in Tesla’s consumer products, including Optimus robots, the Cybercab, and the next-generation Roadster.
Project Dojo was originally designed to train Tesla’s autonomous driving AI using custom D1 chips arranged in a unique 5×5 system-on-wafer design. However, Musk now sees the AI6 chip as the natural successor to Dojo, combining and improving many of its features. He confirmed that all Tesla AI chip efforts will now focus on AI6, which will be produced at Samsung’s new Texas fabrication facility. Musk added that he will be personally involved in speeding up AI6 production.
Is TSLA Stock a Buy, Hold, or Sell?
Analysts remain cautious about Tesla’s long-term outlook due to ongoing declines in EV sales and the ending of EV tax incentives on September 30. On TipRanks, TSLA stock has a Hold consensus rating based on 13 Buys, 15 Holds, and eight Sell ratings. The average Tesla price target of $305.37 implies 7.4% downside potential from current levels. Year-to-date, TSLA stock has lost 18.4%.
