Tesla (NYSE: TSLA) has reportedly disbanded its Dojo supercomputer team, marking a significant strategic pivot away from a project that was once considered a key pillar of its autonomous driving and artificial intelligence (AI) ambitions. The move signals a consolidation of the company’s AI efforts and an increased reliance on external technology partners.

TSLA Reportedly Disbands Dojo Supercomputer Team

Dojo was Tesla’s ambitious in-house supercomputer project, designed to process vast amounts of video data from its vehicle fleet to train the machine-learning models for its Autopilot, Full Self-Driving (FSD), and Optimus robot systems. The project was centered on a custom-designed D1 chip. Tesla bulls saw it as a key long-term growth driver, and Morgan Stanley analyst Adam Jonas, who is among the most vocal Tesla bull among sell-side analysts, had once predicted it could add half a trillion dollars to Tesla’s market value.

However, the program has reportedly faced a number of challenges, including delays and a recent exodus of key talent. Peter Bannon, who was leading the Dojo project, is set to depart the company, and approximately 20 other team members have reportedly left to form a new startup, DensityAI. The remaining members of the Dojo team will be reassigned to other data center and compute projects within Tesla.

Tesla has Faced An Exodus of Top Executives.

This decision comes amidst a wave of executive departures at Tesla. Among the most notable exits are Omead Afshar, a close confidant of Elon Musk who oversaw North American and European operations, and Milan Kovac, the head of the Optimus humanoid robot program. Their departures, along with those of top battery executive Vineet Mehta and North American sales chief Troy Jones.

The company has also been making moves to deepen its relationships with outside tech firms. Tesla recently finalized a $16.5 billion deal with Samsung to supply AI chips and plans to increasingly rely on companies like Nvidia and AMD for its computing needs.

AI Talent War

Meanwhile, there has been an AI talent war among tech companies. Last month, Google recruited Varun Mohan, the co-founder and CEO of AI coding startup Windsurf, along with a substantial portion of his research and development team, in a deal valued at an estimated $2.4 billion.

Meta Platforms and its CEO, Mark Zuckerberg, have also been on an AI talent hiring spree, and in June, the company acquired a 49% stake in Scale AI for approximately $14.3 billion. This deal, valuing the startup at over $29 billion, is Meta’s second-largest financial commitment after its WhatsApp acquisition and is a clear indicator of Mark Zuckerberg’s aggressive push to bolster Meta’s AI capabilities.

Meta has also hired Daniel Gross, co-founder and former CEO of Safe Superintelligence. His expertise in building AI products from the ground up will be instrumental in translating cutting-edge research into tangible user experiences. The company has poached key AI talent from tech giants like OpenAI, Google, and Apple as Zuckerberg doubles down on the company’s bets in artificial intelligence.

Tesla Is Facing a Severe Slowdown in Sales

Meanwhile, even as Musk has been trying to steer Tesla from an EV company to a tech giant focusing on artificial intelligence, robotics, and humanoids, the company’s core automotive business has been facing several challenges with sales falling for the first time last year. The slowdown has only deepened in 2025, and Tesla’s deliveries fell in double digits in the first half of the year.

The Tesla CEO has warned of a few “rough quarters” ahead as the One Big Beautiful Bill Act does away with the EV tax credit, which could hurt EV sales.

Musk Has Sought Higher Voting Rights at Tesla

Musk, who also owns xAI, his AI startup, has been seeking higher voting rights at Tesla so that he is comfortable building AI products at the EV company. Notably, in a post on X in January 2024, Musk said that “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned.”

Currently, Musk owns around a 13% stake in Tesla, and his ownership fell after he sold shares to fund his Twitter acquisition. His public call for higher voting rights in Tesla was seen as a ploy to pressure Tesla’s board for a new compensation structure.

More recently, during Tesla’s Q2 2025 earnings call last month, Musk said that he hoped that the issue of him having higher voting rights would be taken up at the upcoming shareholder meeting.

“I don’t want to find that I’ve got like so little control that I can easily be ousted by activist shareholders after having this army of humanoid robots. I think as I’ve mentioned before, I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” said Musk during the earnings call.

Tesla Board Approved a New Compensation Plan for Musk

Earlier this month, Tesla’s board approved a new compensation package for Musk, granting him a share award valued at approximately $29 billion. This decision follows a protracted legal battle and a prior Delaware court ruling that voided Musk’s 2018 compensation plan, which was then worth over $50 billion.

The new compensation plan, which is yet to be ratified by Tesla shareholders, grants Musk 96 million Tesla shares at $23.34 per share, contingent upon his remaining in continuous service until Aug. 3, 2027, either in the capacity as a CEO or as an executive officer of Tesla, looking after product development or operations.

In its regulatory filing, Tesla said that retaining Musk is “more important than ever before” since the company “is at a critical inflection point that has the potential to create continued extraordinary value” for shareholders.”

The filing added, “Through Elon’s unique vision and leadership, Tesla is transitioning from its role as a leader in the electric vehicle and renewable energy industries to grow towards becoming a leader in AI, robotics, and related services.”

Meanwhile, markets seem to give a thumbs up to Tesla disbanding its Dojo team, and the stock is trading nearly 2% higher in early trade today.