Tesla shuts down Dojo team, lead Peter Bannon departs, 20 staff join DensityAI.

Tesla shuts down Dojo team, lead Peter Bannon departs, 20 staff join DensityAI.

Tesla has disbanded its Dojo supercomputer team, marking a significant shift in its AI and driverless technology strategy. The lead of the project, Peter Bannon, has left the company, and the remaining team members will be reassigned to other data center and compute projects within Tesla [1]. This decision comes as Tesla faces increased competition and internal challenges.

The disbanding of the Dojo team follows the departure of around 20 workers who joined a new AI startup called DensityAI. Founded by former Dojo head Ganesh Venkataramanan and ex-Tesla employees Bill Chang and Ben Floering, DensityAI is reportedly coming out of stealth soon and will focus on building chips, hardware, and software for data centers used in robotics, AI agents, and automotive applications [1].

Tesla's decision to shut down Dojo, which CEO Elon Musk has been discussing since 2019, is a major strategic shift. Musk has previously stated that Dojo would be central to Tesla's AI ambitions and its goal to achieve full self-driving capabilities due to its ability to process vast amounts of video data [1]. However, the company is now increasing its reliance on external technology partners, including Nvidia and AMD for compute, and Samsung for chip manufacturing [1].

The move to shut down Dojo comes at a critical time for Tesla. The company has faced an exodus of key talent this year and has been grappling with rising competition, falling sales, and a consumer backlash to Musk's political activity [2]. Tesla's shares extended postmarket declines after the news was reported, trading down less than 1% as of 5.29 pm in New York [2].

Tesla's recent deal with Samsung to secure AI semiconductors through 2033 further 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 [2].

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 [1].

References:
[1] https://techcrunch.com/2025/08/07/tesla-shuts-down-dojo-the-ai-training-supercomputer-that-musk-said-would-be-key-to-full-self-driving/
[2] https://www.businesstimes.com.sg/companies-markets/transport-logistics/tesla-disbands-dojo-supercomputer-team-blow-ai-effort