Tesla reportedly disbanded its Dojo SuperComputer team and abandoned its in-house chip development for autonomous driving technology. According to a Bloomberg report, Tesla Inc. has disbanded its Dojo team, with its leaders being overturned by carmakers' efforts to build in-house supercomputers to develop driverless vehicle technology, according to those familiar with the issue. Dojo Shutdown, in line with Tesla's board, offers Elon Musk a $29 billion compensation package, prioritizing Tesla's AI goals over other ventures, including Xai, a purely play AI company.
Meet Descencesai, an AI startup founded by former Dojo head Ganesh Venkataramanan
This move shows a key pivot for automakers. Automakers are increasingly relying on external partners such as NVIDIA, AMD, Samsung for their AI and computing needs. Peter Bannon, the lead of the Dojo project, has left Tesla, and the remaining team members will be reassigned to other data centers to calculate initiatives within the company. The decision follows the exit of around 20 Dojo team members who left to form the new AI startup, Dencessai, founded by former Dojo heads. Ganesh Venkataramananalongside former Tesla employees Bill Chan and Ben Floating. Dencesai is preparing the exit for stealth mode, focusing on developing chips, hardware and software for AI-powered data centers for robotics, AI agents and automotive applications. Startups aim to meet high-performance computing needs with a focus on scalable, energy-efficient solutions for next-generation AI workloads. Once Tesla readjusted, the emergence of Dencessai can rebuild the AI hardware landscape and leverage the expertise of former Dojo engineers to challenge established players in the AI data center space.
Why Dojo shutdown is important
The disbandment of the dojo comes at a crucial moment for Tesla. CEO Elon Musk is relocating Tesla as AI and Robotics Company despite challenging the limited launch of Robotaxi in Austin in June 2025. This was faced with a Model Y vehicle with a human co-pilot after reporting irregular driving behavior. First unveiled in 2019, Dojo was pitched as the backbone of Tesla's AI ambitions, particularly to achieve full autonomous driving (FSD) by processing huge amounts of video data. Musk has recently highlighted Dojo, as well as Tesla's second-quarter revenue calls, but his focus has shifted to Cortex, the new AI training supercluster at Tesla's Austin headquarters.Dojo combines Tesla's in-house D1 chip with a supercomputer, announced in AI Day in 2021. The D1, announced by Venkataramanan, is designed to work on Power Dojo along with Nvidia GPUs, with a next-generation D2 chip planned to address data flow bottlenecks. In 2023, Morgan Stanley estimated that Dojo could add $500 billion to Tesla's market value by enabling Robotaxi services and software revenue. However, by August 2024, Musk's rhetoric had pivoted to the cortex, informing them of strategic change.
Tesla is seen from the outside
Tesla's dependence on external partners is increasing. A $16.5 billion contract with Samsung, signed last month, will generate Tesla's AI6 inference chips designed to expand from FSD and Optimus humanoid robots to high-performance AI training. Tesla is deepening its relationship with NVIDIA for its computing power and deepening its AMD additional chip solution. During the second quarter revenue call, Musk suggested a streamlining effort, suggesting a convergence between the Dojo 3 and the AI6 chip to avoid redundancy.
