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: 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.

January 2024 Updates

Multiple updates included...

January 24, 2024: Tesla's Q4 2023 earnings announcement featured numerous business updates. Here are some takeaways from the earnings call...

• Elon Musk on the sharing of sustainable technologies: "We're obviously happy to give any electric car company access to our supercharger network. We're also happy to license full self-driving, perhaps license other technologies, and anything that could be helpful in advancing the sustainable energy revolution."
• Energy Storage: "Our energy storage business had another record year with deployments more than doubling and revenues increasing by more than 50%," CFO Vaibhav Taneja said.
• AI Opportunities and Stock Ownership: Elon Musk wants more stock ownership in Tesla in order for him to build the company's AI strategy and associated business. He stated: "I see a path to creating an artificial intelligence and robotics juggernaut of truly immense capability and power. And my concern would be, I don't want to control it. But if I have so little influence over the company at that stage that I could sort of be voted out by some sort of random shareholder advisory firm."
• Optimus Robots: "I think we've got a good chance of shipping some number of Optimus units next year," Musk said.
• AI Hardware: Tesla is hedging its hardware bets -- developing its own Dojo technologies while also ordering Nvidia hardware. Musk said: "And we're pursuing the dual path of Nvidia and Dojo. But I would think of Dojo as a long shot. It's a long shot worth taking because the payoff is potentially very high. But it's not something that is a high probability. It's not like a sure thing at all. It's a high-risk, high-payoff program. Dojo is working, and it is doing training jobs, and we are scaling it up, and we have plans for Dojo 1.5, Dojo 2, Dojo 3, and whatnot. So I think it's got potential, but I can't emphasize enough. High risk, high payoff."

January 16, 2024: Musk said he would be uncomfortable growing Tesla's AI capabilities unless he owned at least 25% of its the EV company's voting shares, nearly double Musk's current stake, SeekingAlpha reported.

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...