Tesla has taken another fork in the road that could have major implications down the line.
According to The Verge, the move could pay off or be a disaster for the electric vehicle pioneer. Either way, Tesla is experiencing brain drain as its top talent seeks opportunities elsewhere.
What's happening?
In early August, Bloomberg reported that Tesla was shutting down efforts to build Dojo, an in-house supercomputer meant to train autonomous technology.
Peter Bannon, who headed the project, left for Density AI along with 20 other former Tesla engineers.
In a note to clients, Gordon Johnson, founder and CEO of GLR Research, referred to Dojo as Tesla's "secret sauce" for self-driving cars and humanoid robots, according to The Verge.
"The system was supposed to hoover-up data from Tesla's fleet and crunch it to supposedly make the algorithm smarter," Johnson wrote. "Analysts even bought the hype, with Morgan Stanley in 2023 slapping a $500 billion fantasy valuation to boost [Tesla] on Dojo's potential."
Why is Tesla's Dojo decision important?
Tesla's pivot and continued talent exodus are raising serious questions about whether the company will be able to make good on its promises — and that could further damage consumer and investor trust in the company's attempts to drive progress toward a cleaner, cooler future.
Other key Tesla departures include Milan Kovac, head of engineering for Optimus; David Lau, VP of software engineering; and Omead Afshar, who led manufacturing and sales in Europe and North America.
These changes have occurred during a rocky first half of 2025 for Tesla, with lagging sales, plummeting profits, and volatile stocks shaking confidence in the company.
What is Tesla doing after the end of Dojo?
For his part, Tesla CEO Elon Musk spun the pivot away from Dojo as a positive move after Bloomberg published its report.
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Absolutely 💯 Musk wrote on X: "It doesn't make sense for Tesla to divide its resources and scale two quite different AI chip designs. The Tesla AI5, AI6 and subsequent chips will be excellent for inference and at least pretty good for training. All effort is focused on that."
In the future, Tesla is expected to rely more on external partnerships for its in-house technology. Bloomberg pointed to the company's $16.5 billion deal with Samsung through 2033 for semiconductors as an example of this shift and underscored comments from Musk last year in which he called Dojo "a long shot."
The Verge added that how one views the abandonment of Dojo may depend on their opinion of Tesla more broadly. While global appetite for EVs remains robust, suggesting consumers aren't easily swayed from adopting eco-friendly technologies, Musk's polarizing political activities have contributed to an image crisis for the brand.
Nonetheless, the publication argued "investors could end up rewarding Tesla for winding down its Dojo project and conserving its resources, especially as rising EV competition and the loss of government tax breaks continues to be a drag on the company's core business."
It noted that Tesla stock rose 2.5% in the early aftermath of the confirmation to ditch Dojo.
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