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Tesla CEO Elon Musk claims that his company is "by far the best in the world" at real-world AI, surpassing tech giants like Google and its self-driving subsidiary Waymo. Musk argues that Tesla's approach to AI, which focuses on neural nets and vision-first technology, is superior to Waymo's reliance on sensors and infrastructure. This marks a shift in Tesla's industry positioning from an electric car company to an AI company deploying AI across physical environments.

Tesla CEO Elon Musk recently declared that his company is "by far the best in the world" at real-world artificial intelligence (AI), positioning Tesla as a leader in the field. This statement, made during Tesla’s Q2 2025 earnings call, marks a significant shift in the company's industry positioning, moving from an electric car manufacturer to an AI-focused entity [2].

Musk’s claim centers around the distinction between general AI development and real-world AI, which he defines as AI systems deployed in uncontrolled, physical environments. According to Musk, Tesla’s Full Self-Driving (FSD) and Optimus robot platforms are designed to handle these complex, real-time scenarios, setting them apart from competitors like Waymo [2].

Waymo, Google’s self-driving subsidiary, employs a different approach. It uses high-definition maps, LIDAR, and tightly geo-fenced areas to operate its autonomous vehicles. Musk has criticized this method, arguing that it is inherently brittle and not scalable [2]. In contrast, Tesla’s vision-first, neural net-driven AI stack is designed to operate without such infrastructure, relying instead on cameras and other sensors [3].

The shift in Tesla’s focus towards real-world AI is not just about autonomous vehicles. It extends to its humanoid robot initiative, Optimus, which shares the same AI architecture principles applied to different embodiments—vehicles and bipedal robots, respectively [2]. This approach allows Tesla to embed AI into machines that must physically interact with and respond to their environments, a capability that Musk believes Google has not mastered in the physical world [2].

Tesla’s decision to end its Dojo project, a supercomputer designed to process and analyze video data from vehicle cameras, further underscores its commitment to real-world AI. The project was part of an effort to reduce reliance on Nvidia hardware and differentiate itself with innovative, hard-to-replicate solutions [4]. By pivoting to a unified AI6 chip strategy, Tesla is streamlining its AI infrastructure while embracing external partnerships [5].

While Musk’s claim of real-world AI superiority is a bold statement, it reflects a broader industry trend towards hybrid AI models that balance in-house innovation with external partnerships [5]. Tesla’s strategic reallocation of AI resources has implications for the autonomous driving ecosystem, with investors weighing the benefits of efficiency-focused AI6 roadmaps against potential risks from talent attrition and external dependencies [5].

As Tesla continues to develop and deploy AI-driven products that operate safely and autonomously in the real world, it could emerge as a leader in a domain traditionally dominated by tech giants like Google, Amazon, and Apple [2]. Musk’s declaration underscores Tesla’s ambition to define the future of AI not just in the cloud but also on the streets, in homes, and in factories.

References:

[1] https://www.reddit.com/r/SelfDrivingCars/comments/1mmqrnm/waymos_real_goal/
[2] https://www.barchart.com/story/news/34079127/tesla-is-much-better-than-google-by-far-elon-musk-says-theyre-the-best-in-the-world-at-real-world-ai
[3] https://www.reddit.com/r/SelfDrivingCars/comments/1mmxu53/whats_the_difference_in_approach_between_tesla/
[4] https://www.electrive.com/2025/08/11/tesla-ends-supercomputer-project/
[5] https://www.ainvest.com/news/tesla-strategic-reallocation-ai-resources-implications-autonomous-driving-ecosystem-2508/