Tesla CEO Elon Musk has recently shed light on the company's approach to artificial intelligence training, emphasizing that while it wasn't a primary bottleneck for past Full Self-Driving (FSD) advancements, the upcoming Optimus humanoid robot will demand significant computational resources. This revelation comes amidst scrutiny from investors regarding Tesla's AI expenditures and ongoing challenges with its autonomous driving technology, including an investigation by the National Highway Traffic Safety Administration (NHTSA).
Musk's comments were prompted by a discussion on the social media platform X, where investor Gavin Baker from Atreides Management defended Tesla's AI spending against criticism from Jim Chanos. Baker pointed out that Tesla's customers implicitly finance the inference compute hardware, as the core processing for FSD occurs directly within the vehicles. He further argued that the vast amount of real-world video data available to Tesla helps reduce the capitalized training costs for its FSD system, giving the company a competitive edge.
Musk concurred with Baker's assessment, stating that the limited investment in AI training thus far was due to it not being the critical constraint for FSD development. However, he acknowledged that this dynamic would shift with the Optimus project. The highly anticipated humanoid robot, which Musk envisions as a solution for labor shortages and a pathway to universal income, will necessitate a dedicated supercomputer for training, known as Cortex 2. This advanced system is currently under construction at a site adjacent to the Tesla Gigafactory in Texas.
In parallel, the Tesla CEO has not shied away from engaging in public discourse about the broader autonomous vehicle landscape. He recently dismissed the fleet expansion efforts of Alphabet Inc.'s Waymo, an autonomous cab service, as "rookie numbers" after Waymo announced its updated fleet size of 2,500 robotaxis across several cities. Musk has consistently championed Tesla's FSD system, asserting its potential for unprecedented rapid diffusion through simple software updates to millions of existing vehicles. Despite these ambitious claims, Tesla's FSD technology is currently under investigation by the NHTSA due to several traffic violations and accidents involving Tesla vehicles utilizing either FSD (Supervised) or Autopilot, an inquiry that impacts over 2.88 million of the automaker's vehicles. This highlights the complex balance between innovation, market expectations, and regulatory oversight within the rapidly evolving field of autonomous driving.
Tesla's financial performance currently shows strength in momentum and quality metrics, with satisfactory growth figures, though its value proposition is considered poor. The company's stock has demonstrated a positive price trend across short, medium, and long-term horizons. These insights, along with others, are accessible through various market analysis platforms that offer stock rankings and detailed company information, enabling investors to make informed decisions in the dynamic automotive and technology sectors.