Electric vehicle giant Tesla has once again talked about its planned $500 million Dojo supercomputer project in Buffalo, New York. According to The Buffalo News, the Musk-led company is ready to increase its rent for Giga New York by twofold if its Dojo plans fail.
Tesla doubles down on Buffalo with $500M Dojo supercomputer project
Tesla has recently inked a new agreement with the Buffalo government, extending the electric automaker’s lease contract on the Giga New York factory in Buffalo for an additional five years until 2034.
The latest deal also includes an option to extend for another ten years after that, solidifying Tesla’s long-term presence in the city. Tesla is also reportedly boosting its job commitment to Buffalo by 340 more positions.
Agreement details
Under the terms of the new agreement, Tesla will allocate $500 million to its Dojo supercomputer project in Buffalo.
The company plans to invest $350 million of the total amount by the end of 2025, per the report.
Suppose Tesla fails to accomplish its Dojo supercomputer project as planned. In that case, it agrees to pay double the amount of its rent for Giga New York until it completes the promised $500 million investment.
In addition, Tesla will also pay $2 million annually, starting in 2024 and continuing until 2029, for Giga New York. After that, the annual rent fee will increase to $5 million until 2034.
The Musk-led automaker also agreed to allocate $250,000 per year to boost workforce training programs, with the state utilizing funds from Tesla’s rent payments.
Supercomputer project to create jobs and drive innovations
In hindsight, New York State Governor Kathy Hochul proudly announced Tesla’s proposed $500 million investment in Buffalo in late January 2024.
New York State officials have also outlined that Tesla’s project will solidify its commitment to its presence in Buffalo, potentially stimulating additional investments in various industries like Artificial Intelligence (AI).
“I think it’s a good thing. We’re seeing this increase in employment. We’re seeing the continued investment that anchors them. And there’s no additional state resources.”
Empire State Development Chief Operating Officer Kevin Younis
For context, Dojo is a Tesla-developed supercomputer system that will serve as a training ground for its AI initiatives (particularly for FSD). It is a crucial part of the company’s vision-only approach as it will help store and process all the video data Tesla EVs collected around the world and run millions of simulations to train its AI models on the data.
