On Friday, New York Governor Kathy Hochul said during a news conference that electric vehicle maker Tesla will be spending $500 million to install the Dojo supercomputer at its “Gigafactory” in Buffalo, NY.
Dojo, first announced at Tesla’s AI Day event in 2021, is a supercomputer that is being developed to help advance Tesla’s autonomous driving system. The EV maker plans to use Dojo to process reams of video data that is produced by its vehicles to train the AI that now powers the Full Self-Driving Beta, which the company claims to be the most advanced driver assistance software currently available.
Tesla’s $500 Million Dojo Supercomputer is Coming to New York
Last year, Musk said that Tesla plans on spending “well over $1 billion” on the supercomputer. Tesla has reportedly been working on Dojo for at least five years.
In a call to investors and analysts on Wednesday, Musk portrayed the supercomputer as a high-risk, high-reward endeavor that is a “long-shot worth taking” because of its “very high” payoff potential.
He emphasized the potential of the project, even outlining plans for future iterations such as Dojo 1.5, Dojo2, and beyond.
In September, Morgan Stanley analysts estimated that Dojo could add as much as $500 billion to Tesla’s market value. The report also noted that the bank views Tesla as both an automaker and a tech company, with its “biggest value driver” being revenue from software and services.
Tesla Plans to Revive Gigafactory 2 in Buffalo That Previously Made Solar Roof Riles
Bringing the Dojo project to Buffalo is set to be the latest shift in Tesla’s plans for the factory once dubbed “Gigafactory 2”. Tesla took over the facility from troubled solar panel company SolarCity in 2016 intending to produce solar tiles there. The automaker had even committed $750 million to the initiative.
However, Tesla struggled to produce its solar tiles at the required scale, which led to its partner, Japanese giant Panasonic, pulling out of the plant in 2020. Tesla then pivoted to using the facility to employ people who labeled training data for its cars’ Autopilot software and building superchargers.
While the $500 million investment received praise during Governor Hochul’s press conference, Musk downplayed the figure noting that Tesla would be spending far more money on hardware from Nvidia in 2024.
In an X post, the billionaire said the amount was equivalent to 10,000 AI-powered H100 GPUs from Nvidia. He also noted that the stakes for being competitive in AI are at least “several billion dollars per year” currently.
The Dojo project would give a much-needed boost to the $950 million factory on South Park Avenue, which had largely failed to become the economic powerhouse that was envisioned by former governor Andrew Cuomo. The plant was the centerpiece of the Buffalo Billion initiative.
Elon Musk’s AI Startup xAI is Preparing to Take on Sam Altman’s OpenAI
Meanwhile, Elon Musk’s artificial intelligence start-up xAI is seeking to raise as much as $6 billion in funding to take on Microsoft-backed OpenAI, according to a Financial Times report. The company is valued at $20 billion.
xAI is reportedly in talks with investors from the Middle East and Hong Kong, with Morgan Stanley speculated to be leading the fundraising efforts.
Last week, Bloomberg reported that xAI had secured $500 million in funding toward a goal of $1 billion. The publication said the startup was in talks for a valuation of between $15 billion to $20 billion.
However, Musk lashed out against the report on X saying it was “fake news”. The CEOs of Tesla, SpaceX, and X (formerly Twitter) launched xAI in 2023 and released a beta version of its AI chatbot Grok later in the year.