Nvidia
is the stock market’s AI darling, but
Tesla
CEO Elon Musk wants to steal some of its shine, showing investors his car company is an AI investment, too.
Tesla
(ticker: TSLA) is launching a $300 million AI computing cluster Tuesday, according to
Oppenheimer
analyst Rick Schafer. The supercomputer “will employ 10,000
Nvidia
H100 GPUs and is more powerful than the world’s third highest-performing supercomputer,” noted the analyst.
Tesla didn’t respond to a request for comment about the computer.
The news illustrates something about the way the AI ecosystem is evolving. Nvidia (ticker: NVDA) has the hardware and software that is essentially responsible for AI computing. Tesla is using Nvidia products to develop what Elon Musk hopes is the first truly killer AI app: Self-driving cars.
“Tesla is significantly enhancing its computing capabilities to train its full self-driving technology faster,” added Schafer in his report. “Tesla plans to spend over $2 billion on AI training in 2023 and another $2 billion in 2024.”
Musk has said repeatedly that self-driving technology will represent a huge increase in value for his company. His vision is to turn all the Teslas on roads into ‘robotaxis’ with the flip of a switch when the software that runs the driver-assistance features is good enough. Then customers will pay upfront or annual fees to access the tech. And Tesla itself can run a fleet of robotaxis.
The new AI cluster is teaching the software, helping to accelerate development. The use of artificial intelligence is why Musk has also said Tesla is an AI leader, adding that developing self-driving cars is far harder than developing a ChatGPT-like AI.
Getting self-driving technology to the point where drivers can stop paying attention to the road, or where mass-market cars can operate without a driver has been difficult. Progress is being made. Musk took a self-driving Tesla ride over the weekend and posted it on his social-media platform X, which was formerly known as Twitter.
Investors know about Musk’s AI ambitions. Tesla stock isn’t really reacting to the news regarding the new computer. Shares are down 0.2% in early trading Tuesday. The
S&P 500
is flat. The
Nasdaq Composite
is off 0.2%.
Nvidia stock is down 0.4%.
Write to Al Root at [email protected]
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