Elon Musk’s Tesla shuts down chip unit after losing 20 employees to THIS Indian-origin executive’s AI startup

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Dojo is a Tesla supercomputer used to train the machine-learning models behind the carmaker’s Autopilot and Full Self-Driving systems. Musk confirmed the change at Tesla through a post on his social media platform X. Read on to know more on this.

Tesla boss and world’s richest man Elon Musk.

Elon Musk’s Tesla is closing its chip unit Dojo, Bloomberg reported, adding that its head Peter Bannon is set to leave the company. The major change comes after the team lost roughly 20 employees to newly-formed startup DensityAI, which has been co-founded by former Dojo head and Indian-origin executive Ganesh Venkataramanan. Tesla now plans to increase its reliance on external partners, including chip giant Nvidia, Advanced Micro Devices (AMD), and Samsung Electronics Co.

What was Dojo and what was its aim?

Dojo is a Tesla supercomputer used to train the machine-learning models behind the carmaker’s Autopilot and Full Self-Driving systems. The computer takes in video data captured by vehicles and swiftly processes it to enhance algorithms. In the past, analysts said Dojo could provide Tesla a significant competitive advantage. Morgan Stanley estimated in 2023 that the supercomputer could eventually bring USD 500 billion to the company’s market value.

What did Musk say about disbanding Dojo?

Musk confirmed the change at Tesla through a post on his social media platform X. He wrote: “It doesn’t make sense for Tesla to divide its resources and scale two quite different AI chip designs.” The billionaire added, “The Tesla AI5, AI6 and subsequent chips will be excellent for inference and at least pretty good for training. All effort is focused on that.”

What are the challenges facing Tesla?

Tesla’s move comes after close to two dozen staffers moved to DensityAI, a startup co-founded by Venkataramanan along with former Tesla employees Bill Chang and Ben Floering. DensityAI is working on chips, hardware, and software that will power data centers for AI. Tesla has seen an exodus of executives and cut thousands of jobs as it grapples falling sales amid rising competition and consumer backlash over Musk’s political activity in the last year.



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