Tesla has dissolved its Dojo supercomputer team, with team leader Peter Bannon set to leave the company, according to sources.

The move signals a shift away from developing in-house chips for self-driving technology.

Remaining Dojo employees are being reassigned to other data center and computing projects.

Tesla, led by CEO Elon Musk, will increase its use of external technology partners, including Nvidia and AMD for computing and Samsung for chip manufacturing.

About 20 workers recently left for DensityAI, a new data center hardware startup founded by former Dojo employees.

The Dojo project was designed to train machine-learning models for Tesla’s Autopilot, Full Self-Driving features, and Optimus robot.

Tesla shares fell less than 1% in postmarket trading after the news.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Tesla’s shift signals broader industry move from vertical integration to specialized partnerships

The Dojo shutdown represents Tesla’s strategic pivot away from building everything in-house, a notable change for a company known for vertical integration.

Tesla recently signed a $16.5 billion deal with Samsung to secure AI semiconductors through 2033, demonstrating its commitment to external partnerships over internal development 1. This follows the company’s decision to rely on established players like Nvidia and AMD for compute power rather than developing proprietary solutions.

This shift reflects the immense technical complexity and capital requirements of cutting-edge AI hardware development. Even with substantial resources and experienced leadership, Tesla found it more practical to leverage existing industry expertise.

The decision mirrors a broader trend where companies focus on their core competencies while partnering for specialized technologies, particularly in rapidly evolving fields like AI computing where keeping pace with industry leaders requires massive ongoing investment.

2️⃣ Specialized AI talent exodus highlights retention challenges in competitive market

The departure of about 20 Dojo team members to form DensityAI illustrates how specialized AI talent can quickly pivot to entrepreneurship when internal projects face uncertainty.