Tesla is dismantling its ambitious Dojo supercomputer program, a move that marks a sharp pivot in the company’s in-house AI chip strategy. The project’s leader, Peter Bannon, is leaving the automaker as CEO Elon Musk orders the years-long effort to be shut down, according to sources familiar with the matter.
The decision follows a wave of departures from the Dojo team—about 20 employees have left for DensityAI, a new AI hardware startup founded by former Tesla executives, including ex-Dojo chief Ganesh Venkataramanan. Remaining Dojo staff will be reassigned to other Tesla computing and data center initiatives.
Tesla will now lean more heavily on external technology partners for its AI computing needs, working with Nvidia and AMD for processing power, and Samsung Electronics for chip manufacturing. The automaker recently struck a $16.5 billion deal with Samsung to secure AI semiconductors through 2033, with plans to produce its upcoming AI6 chip at a new Texas facility.
Dojo, once touted as a potential $500 billion competitive advantage by Morgan Stanley, was designed to accelerate training for Tesla’s Autopilot, Full Self-Driving, and Optimus humanoid robot systems. Built around the company’s custom D1 chip, it was positioned as Tesla’s answer to Nvidia’s AI accelerators.
Musk confirmed the shutdown on X (formerly Twitter), stating it “didn’t make sense to divvy resources between two different AI chip designs.” The move comes as Tesla faces increasing competition, slowing sales, and a series of high-profile executive exits, including Optimus engineering head Milan Kovac and VP of software engineering David Lau.
While Musk once called Dojo a “long shot worth taking,” Tesla’s new approach suggests a convergence between its in-house designs and those of its partners. Speaking on the July 23 earnings call, Musk hinted at aligning future hardware:
“Thinking about Dojo 3 and the AI6 inference chip… we want to try to find convergence there, where it’s basically the same chip.”
With the closure of Dojo, Tesla’s AI ambitions remain intact—but the road ahead will be built more on partnerships than solo bets.
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