Tesla Disbands Dojo Supercomputer Team Amid Restructuring

Tesla has scrapped its Dojo Supercomputer AI team, responsible for in-house AI capabilities, including self-driving chips and AI model training efforts. Over 20 employees have left to join DensityAI, a newly formed company founded by former Tesla executives. The company will reassess its AI needs, potentially outsourcing to Nvidia, AMD, or Samsung. Meanwhile, Tesla announced a $16.5 billion deal with Samsung to build AI6 chips for its next-gen self-driving systems.

Tesla Inc. (TSLA) has announced the shutdown of its Dojo Supercomputer team, a significant shift in its AI and driverless technology strategy. The team, responsible for developing in-house AI capabilities including self-driving chips and AI model training efforts, has been disbanded. The decision follows the departure of over 20 employees, including senior-level individuals, who joined DensityAI, a newly formed AI company founded by former Tesla executives.

The leadership of the Dojo team, including Peter Bannon, has left Tesla, with the remaining team members being reassigned to other data center and compute projects within the company. The move is part of Tesla's strategic pivot towards outsourcing its AI development needs. The company is now looking at external technology partners such as Nvidia Corp (NVDA), Advanced Micro Devices Inc. (AMD), and Samsung Electronics (SSNLF) for its AI requirements.

The shutdown of the Dojo team comes at a critical time for Tesla. The company has been facing increased competition, falling sales, and a consumer backlash to Elon Musk's political activity. Despite these challenges, Tesla has secured a $16.5 billion deal with Samsung to build AI6 chips for its next-gen self-driving systems. The deal involves Samsung building AI6 chips for Tesla, which will power the company's upcoming self-driving systems.

The decision to shut down Dojo and shift towards external partners is a strategic move aimed at focusing resources and accelerating the development of AI capabilities. Tesla's CEO, Elon Musk, has emphasized the importance of concentrating its AI chip development on a single architecture for its AI5 and AI6 processors. He has stated that the AI5, AI6, and subsequent chips will be excellent for inference and at least pretty good for training, with all efforts now focused on this line.

Tesla's recent deal with Samsung underscores the company's strategic pivot. The plan is for an upcoming plant in Texas to produce Tesla's next-generation AI6 chip, diversifying its sourcing beyond leading chipmaker Taiwan Semiconductor Manufacturing Company. During Tesla’s second-quarter earnings call, Musk hinted at a potential convergence between Dojo 3 and the AI6 inference chip, suggesting that future iterations of the company’s in-house technology could align with that of its partners.

The shutdown of the Dojo team and the shift towards external partners are part of Tesla's broader strategy to streamline its operations and focus on its core competencies. The move is expected to help Tesla navigate the challenges it faces in the competitive automotive and technology landscapes.

References:
[1] https://www.benzinga.com/markets/tech/25/08/46989375/tesla-scraps-dojo-supercomputer-ai-team-as-elon-musk-abandons-internal-chip-effort-report
[2] https://www.bloomberg.com/news/articles/2025-08-06/former-tesla-executives-start-automotive-ai-company-densityai
[3] https://www.ainvest.com/news/tesla-shuts-dojo-team-lead-peter-bannon-departs-20-staff-join-densityai-2508/
[4] https://stocktwits.com/news-articles/markets/equity/elon-musk-reacts-to-report-tesla-is-pulling-plug-on-dojo-supercomputer-doesn-t-make-sense-to-split-ai-chip-focus/chrVCUDRd3u