Tesla AI Strategy: Elon Musk on FSD, Optimus Robots, Dojo Supercomputer

Tesla is far more than an electric vehicle (EV) and energy storage company. It also ranks as one of the world's leading artificial intelligence (AI) businesses. But how is Tesla developing AI systems with human sustainability in mind? Here are some clues...

First, some background: Hyperscale cloud companies such as Microsoft (working with OpenAI), Google (aligned with Anthropic) and Amazon Web Services (also working with Anthropic) often dominate the artificial intelligence (AI) conversation among CIOs and futurists. Meanwhile, hardware companies such as NVIDIA, AMD, Dell, Hewlett Packard Enterprise (HPE), IBM, Intel and Lenovo have focused on supercomputer AI opportunities.

Still, some pundits believe Tesla could emerge as the world's top AI company. Among the reasons: Sensors in Tesla's cars provide a live, real-world network for data gathering. And Tesla's back-end infrastructure -- including homegrown supercomputer technology -- can gather, manage and analyze all of that data.

AI and Sustainability: Admittedly, AI is both a blessing and a burden for the world's sustainability efforts. While some AI applications allow scientists, universities and businesses to study climate change, the overall AI movement also requires heavy energy use. And of course, some pundits worry AI and robots
could ultimately threaten humanity.

So how is Tesla developing AI systems with human sustainability in mind? On the R&D front, Tesla's major AI investments involve:

• Full self-driving (FSD) cars, trucks and autonomous vehicles.
• Optimus robots.
• Dojo, a supercomputer that went into production in August 2023.

Here is a regularly updated timeline of developments...

Tesla AI Strategy: July 2024 Updates

• Tesla Robotaxi - More Delay Details: Elon Musk has requested "an important design change to the front of the robotaxi model, SeekingAlpha reported. The request forced Tesla to delay its robotaxi reveal, originally scheduled for August 2024. A new reveal date has not been announced, though speculation suggests Tesla is targeting October 2024. Related: See our Tesla AI strategy timeline.
• Robotaxi Delayed?: Tesla is postponing its planned robotaxi unveiling to October 2024. The event had been slated for August 8, 2024. The delay will "allow teams working on the project more time to build additional prototypes," Bloomberg reported.
• Tesla Robots: Tesla's new Optimus design will be complete before 2025, CEO Elon Musk said on X.

Tesla AI Strategy: June 2024 Updates

• Dell: The PC and server giant, according to Michael Dell, is building a "Dell AI factory with Nvidia to power Grok for xAI. Elon Musk added: "To be precise, Dell is assembling half of the racks that are going into the supercomputer that xAI is building"
• AI Lawsuit Dropped: Musk dropped his lawsuit against OpenAI and co-founders Sam Altman and Greg Brockman, CNBC reported. In the suit, Musk alleged that OpenAI abandoned its social-good mission in order to focus on revenue opportunities.
• Elon Musk vs. Apple-OpenAI: An Apple-OpenAI partnership drew criticism from Musk, who alleges the relationship could trigger security risks on Apple's hardware. Musk is therefore threatening to ban Apple products within his companies -- which include Tesla, X (formerly Twitter) and SpaceX, among others. Musk, an early OpenAI investor, alleges that OpenAI lost its way by prioritizing revenues over social good. Amid that backdrop, Musk is building an OpenAI rival called xAI.
• AI Chip Orders: After reports stated that Musk routed Nvidia AI chips from Tesla to X (formerly Twitter), Musk wrote on X: "Of the roughly $10B in AI-related expenditures I said Tesla would make this year, about half is internal, primarily the Tesla-designed AI inference computer and sensors present in all of our cars, plus Dojo. For building the AI training superclusters, NVidia hardware is about 2/3 of the cost. My current best guess for Nvidia purchases by Tesla are $3B to $4B this year."

AI Strategy: May 2024 Updates

• China Data Centers: Tesla has been developing plans for a data center in China to train the algorithm needed for more fully autonomous vehicles, Reuters reported. Musk previously expressed opposition to a China-based data center, arguing that data transfer to the United States was the most efficient option, the report asserted. Meanwhile, Tesla CEO Elon Musk has been highly critical of Reuters' media coverage.

Tesla AI Strategy: April 2024 Updates

April 23: Musk and his lieutenants shared several strategic updates during Tesla's earnings call. The updates were particularly timely. Indeed, Tesla's stock had declined more than 40% from January 2024 through mid-April 2024 amid slowing EV market growth and increased competition from China manufacturers. During the April 23, 2024 earnings call, Tesla offered numerous updates on its EV strategy. But the bullet points below focus mostly on Tesla's AI and robotics strategy...

• Robotaxi: Tesla will be "showcasing a purpose-built robotaxi, or Cybercab, in August" 2024, Musk said.
• AI Compute: Musk said: "Over the past few months, we've been actively working on expanding Tesla's core AI infrastructure. For a while there, we were training constrained in our progress. We are, at this point, no longer training constrained and so we're making rapid progress. We've installed and commissioned, meaning they're actually working 35,000 H100 computers or GPUs... And we expect that to be probably 85,000 or thereabouts by the end of this year and training, just for training."
• Full Self-Driving (FSD) Software Version 12: Tesla has pushed the software to 1.8 million vehicles and "we're seeing about half of people use it so far and that percentage is increasing with each passing week. So we now have over 300 billion miles that have been driven with FSD V12," Musk said.
• Optimus Robots: Tesla, Musk said, expects to have Optimus robots "in limited production in the natural factory itself, doing useful tasks before the end of this year. And then I think we may be able to sell it externally by the end of next year [2025]. These are just guesses."
• Total Addressable Market (TAM) for Robots: "As I've said before, I think Optimus will be more valuable than everything else combined. Because if you've got a sentient humanoid robots that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy."
• Energy Storage and Solar Rooftops: Tesla expects the energy storage deployments for 2024 to grow at least 75% higher from 2023, CFO Vaibhav Taneja said. Curiously, Tesla did not mention its rooftop solar shingle business during the earnings call.

April 23: The company is expected to announce quarterly financial results. We'll listen in for potential AI, solar energy, EV charger network, renewable energy and robotics updates -- especially as they pertain to staffing levels and recent layoffs (see April 15-18 update below).

April 15 & 18: Tesla layoffs will impact more than 10% of employees at the electric vehicle (EV) car maker. The layoff plan will include Tesla manufacturing plants in upstate New York -- where employees focus on solar roof tiles and fast-charging EV equipment, Reuters reported. That Buffalo, New York, location also is "set to be the home of its Dojo supercomputer project," the report noted. Still, we don't know if or how many jobs that specifically involve solar roofs, EV charging and Dojo supercomputer experts will be cut.

Tesla AI Strategy: February 2024 Updates

February 10: The Wall Street Journal reinforced questions about Elon Musk's commitment to AI development at Tesla. The article mostly focused on our January 16 entry further below.

More: Continue to page two for more details about Tesla's AI capabilities, Optimus Robots, avoiding a Terminator Judgment Day outcome, and the Dojo Supercomputer efforts...