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Investing.com -- Tesla’s reported decision to shut down its internal Dojo supercomputer program should be a boost for chipmakers NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD), Wells Fargo analysts said.
Bloomberg and other outlets reported on August 7 that Tesla (NASDAQ:TSLA) is disbanding its Dojo team, which focused on building AI-optimized silicon for the automaker’s self-driving technology.
“This should be viewed as a positive for NVIDIA and AMD as this likely increases Tesla usage of general purpose GPUs for AI,” Wells Fargo (NYSE:WFC) wrote.
The analysts noted reports that Peter Bannon, who led the Dojo effort, is leaving and Elon Musk has ordered the project’s shutdown.
Wells Fargo said the move “could be seen as a significant shift” from Musk’s previous emphasis on internal AI hardware, given the continued performance gains from NVIDIA’s GPUs.
Tesla introduced Dojo in August 2021 and reported initial deployment in July 2023, using it for Autopilot and Full Self-Driving development.
The reports mark “very different” messaging from Musk’s late-July comments during Tesla’s second-quarter earnings call.
Wells Fargo explained that at the time, he said Dojo 2 would operate at scale in 2026, equivalent to 100,000 NVIDIA H100 chips, and suggested Dojo 3 and the Ai6 inference chip would converge into the same design.
Tesla has been expanding its reliance on NVIDIA hardware. In the second quarter, it disclosed a 50,000-unit NVIDIA H100 training cluster and Musk later announced plans to deploy an additional 16,000 NVIDIA H200 GPUs at its Texas Gigafactory.
Dojo’s in-house chips, made using TSMC’s System-on-Wafer process, represented a $1 billion investment, according to Tesla’s previous disclosures.