Tesla Disbands Dojo Team, Shifts AI Compute to External Partners

Tesla has officially disbanded its in-house Dojo supercomputer team, marking a major strategic shift in the company’s approach to artificial intelligence development. Pete Bannon, the company’s chip and Dojo supercomputer chief, has left Tesla after nearly a decade of service. Bannon was instrumental in designing custom silicon and leading the Dojo project, an ambitious effort to build Tesla’s own AI training supercomputer to support its Full Self-Driving and robotics ambitions. His departure comes as the Dojo team is being dissolved, with remaining engineers being reassigned to other computing and data center initiatives within Tesla [1][2].

Bannon had joined Tesla in 2016 from Apple, where he played a key role in developing the A-series chips. At Tesla, he became a central figure in shaping the automaker’s silicon strategy, overseeing projects that were expected to reduce the company’s reliance on external AI hardware providers like NVIDIA. However, the Dojo project, which was intended to be the AI equivalent of Tesla’s Supercharger network, has faced persistent technical challenges and delays since its announcement in 2021 [2][5].

The decision to disband the team was reportedly ordered by CEO Elon Musk, who has now shifted the company’s focus toward outsourcing AI compute needs to established chip manufacturers. Tesla has entered a major partnership with Samsung for the production of its next-generation A16 AI chips, estimated at $16.5 billion. The company is also increasing its use of NVIDIA’s high-performance GPUs for AI training. This move represents a significant departure from Musk’s original vision of achieving full vertical integration in AI hardware [6][7].

The dissolution of the Dojo team also follows a pattern of talent attrition at Tesla. Key engineers and executives have left the project over the past several years, with around 20 team members forming a new AI startup called DensityAI. The exodus has been cited as a factor in the project’s lack of progress, with some former Tesla employees now competing in the AI chip space [2]. The loss of senior leadership, including Bannon and former Optimus robotics head Milan Kovac, underscores broader challenges in retaining top talent as the company navigates strategic repositioning [1].

Tesla’s shift toward external partnerships is being seen as a pragmatic response to the complexities of in-house supercomputing. While the company has made advances in AI inference computing—such as the AI5 and AI6 chips—it has struggled to maintain momentum in large-scale AI training infrastructure. The decision to outsource production to Samsung and TSMC may allow Tesla to access cutting-edge hardware without the high costs and risks associated with building proprietary supercomputers [6][7].

The move also aligns with Tesla’s recent expansion of its Robotaxi services in Austin and San Francisco. Although these services still rely on human oversight, the company is accelerating the development of autonomous systems through external compute resources. This shift may reflect a broader recalibration of priorities, with Tesla focusing on leveraging industry leaders in chip manufacturing rather than pursuing full self-sufficiency in AI hardware [6].

The long-term impact of the Dojo team’s dissolution remains to be seen. While some analysts had previously forecast ambitious growth tied to the success of Dojo, the project’s cancellation could affect those expectations. However, others argue that the move to external partners may allow Tesla to concentrate its resources more effectively and maintain competitiveness in a rapidly evolving market [2].

Source:

[1] Reuters, Tesla shuts down Dojo supercomputer team, reassigns workers amid strategic AI shift, (https://www.reuters.com/business/autos-transportation/tesla-shuts-down-dojo-supercomputer-team-reassigns-workers-amid-strategic-ai-2025-08-07/)

[2] Electrek, Tesla Dojo supercomputer looks dead as more execs leave for competing startup, (https://electrek.co/2025/08/07/tesla-dojo-supercomputer-looks-dead-as-more-execs-leave-competing-startup/)

[5] Reuters, Tesla disbands Dojo supercomputer team, Bloomberg News reports, (https://www.reuters.com/business/autos-transportation/tesla-disbands-dojo-supercomputer-team-bloomberg-news-reports-2025-08-07/)

[6] TweakTown, Tesla disbands ambitious Dojo supercomputer team, shifts compute power to AMD and NVIDIA, (https://www.tweaktown.com/news/106901/tesla-disbands-ambitious-dojo-supercomputer-team-shifts-compute-power-to-amd-and-nvidia/index.html)

[7] AInvest, Tesla Halts Dojo Chip Project, Shifts to External Partners, (https://www.ainvest.com/news/tesla-halts-dojo-chip-project-shifts-external-partners-2508/)