Tesla Declares Itself an AI Company, Accelerates Launch of Affordable Models

During Tesla's first-quarter earnings call for 2024, CEO Elon Musk made a significant declaration, stating that Tesla should be considered an artificial intelligence (AI) company rather than just an electric vehicle manufacturer. This announcement comes as Tesla reported a 55% drop in net profit compared to the same period last year, with revenue declining by 9% to $21.3 billion.

Musk emphasized Tesla's focus on developing advanced AI capabilities, particularly for autonomous driving and other applications. He highlighted the company's investment in AI infrastructure, having installed and commissioned 35,000 Nvidia H100 GPU equivalents for AI training, with plans to increase that number to around 85,000 by the end of the year. Tesla's AI training compute has increased by more than 130% in the first quarter alone.

Despite the financial challenges, Musk announced plans to speed up the launch of more affordable Tesla models, with production expected to start in early 2025 or possibly even later this year. These new models will be built using aspects of Tesla's next-generation platform and current production lines, allowing for more cost-effective manufacturing. Musk expressed confidence in Tesla's ability to double its 2023 production of around 1.8 million vehicles by 2025.

Why this matters: Tesla's shift towards positioning itself as an AI company signifies a broader trend in the automotive industry, where advanced technologies like autonomous driving and AI-powered features are becoming increasingly important. The company's plans to introduce more affordable models could help expand the adoption of electric vehicles and make them more accessible to a wider range of consumers.

Tesla's strategic initiatives extend beyond electric vehicles, with Musk highlighting the company's efforts in developing humanoid robots like Optimus and its autonomous robotaxi service. He believes that Tesla's AI and robotics capabilities will be more valuable than its automotive business in the future. Musk also mentioned that Tesla is in discussions with a major automaker about potentially licensing its Full Self-Driving (FSD) technology.

Key Takeaways

• Tesla CEO Elon Musk declares Tesla an AI company, not just EV maker.
• Tesla invested $1B in AI infrastructure, plans to expand to 85,000 GPUs.
• Tesla plans to launch more affordable models using next-gen platform by 2025.
• Tesla aims to double 2023 production to 3.6M vehicles by 2025.
• Tesla faces challenges like macroeconomic conditions, supply constraints, and declining revenues.