American billionaire Elon Musk has just confirmed plans to partner with California-based semiconductor company Advanced Micro Devices Inc. (AMD) for chip supply.
According to Bloomberg, the Tesla Chief Executive’s plans to purchase AMD chips is just a portion of a “spending spree” to fund the automaker’s computing hardware development for artificial intelligence (AI).
Context
TSLA investor @SawyerMerritt reported on X, citing Governor Kathy Hochul, that Tesla plans to allocate a whopping $500 million to install a Dojo supercomputer in New York.
The X user subsequently elaborated in another post, indicating the possibility that the hardware may not be a Dojo but an NVIDIA-based supercomputer (or both).
The X post gained CEO Musk’s attention and response. The Tesla boss confirmed that the unit will be a Dojo supercomputer.
Another Tesla fan engaged in the X discussions and asked CEO Musk about the company’s plans to buy AMD chips. In response, CEO Musk simply said, “Yes.”
Why AMD?
Nvidia undoubtedly dominates the AI accelerator manufacturing industry, which is basically processors designed to meet the data-intensive requirements of the technology.
However, competitors like AMD continue to progress with their own products to catch up. In January 2023, it introduced the new MI300 portfolio that can supposedly operate AL software “faster than competitors can.” As a result, AMD shares slightly increased more than 1% after hours on Friday, following a decline in extended trading.
All that said, it is unsurprising that Tesla chose AMD over other competitors in the market.
Dojo’s development
Tesla CEO Elon Musk announced plans to spend more than $1 billion for the development of its Dojo supercomputer by the end of the year.
Dojo is an in-house supercomputer that can manage enormous amounts of data, such as video recorded by Tesla EVs, to support the company’s autonomous driving software.
Interestingly, Tesla aims to accelerate Dojo’s development by leveraging its homegrown efforts and Nvidia’s cutting-edge technology.
“We’re pursuing the dual path of Nvidia and Dojo. But I would think of Dojo as a long shot. It’s a long shot worth taking because the payoff is potentially very high.”
Tesla CEO Elon Musk said during the Earnings Call on Wednesday
Tesla’s Dojo supercomputer efforts highlight its determination to win the AI and autonomous driving development race. It would play a significant role in the American automaker’s goals to reach full autonomy, opening a potential new revenue stream. In addition, it can also encourage more people to shift from traditional cars to Tesla’s smart electric vehicles.
