Transcript
Rick Nars (0:05)
Potential buyout candidates, a potential shift in a popular automaker's AI strategy. I guess you can say that this show has a lot of potential. Will our play on words over promise or under deliver? Find out right now on Motley Fulmar. I'm Rick Nars and today I'm joined by fellow analyst Carl Thiel and Jason hall with bold predictions for what we believe could be the next rule breaker to get bought out. We'll also take a look at a whole new stock quote game. But first, Tesla taps the regenerative brakes on its generative AI supercomputer. Late last week it was reported that Tesla was scrapping its Dojo supercomputer team, which Elon Musk confirmed over the weekend, putting an end to at least this chapter of its in house AR hardware dream. Let's look at both sides of the story, dueling fool style. Jason will bring a bullish spin to the story. But Carl, let's start with you in the bear den.
Carl Thiel (0:55)
Yeah, it was almost exactly two years ago that a Morgan Stanley analyst suggested that Tesla's Dojo supercomputer could add a half trillion, that's with a T dollars to the company's valuation. Now it's dead. And as I'm sure Jason is going to discuss, the stock has been going up since that announcement. Bulls are obviously hoping that less spending means better capital management. But not so long ago, bulls believed that this project would give Tesla critical advantages. So look, not only was this supposed to allow the company to leverage all that data coming in from cars on the highway for, but it was a bet on other future possibilities that they could leverage. Dojo was going to save money because it would require the company to buy fewer incremental Nvidia GPUs. Moreover, it was supposed to be better. The D1 chip that was the sort of core of Dojo wasn't just a general purpose gpu. It had a massive parallel design, but it was application specific. It was supposed to cut training times. It was in fact supposed to be a kind of a triple winner for them. It was supposed to be better, better in performance. It was supposed to be cheaper to make and it was supposed to be much cheaper for them to own. Not only because it was going to be more efficient but also obviously you weren't paying Nvidia and paying for their profits. And you know, a lot of this sort of vision of the future came directly from Elon Musk and it was, you know, pretty much just accepted by the analyst community. The company and many analysts believe that Dojo could serve as the foundation for other future network services businesses like managing the hub of a robotaxi fleet or logistics and delivery fleets. It could handle vehicle infotainment. They even thought maybe they could rent out COMPUTE sort of AWS style to other businesses that were trying to do AI training. And of course, if you believe that a big part of Tesla's future is humanoid robots, you're probably counting on Dojo again for fast, efficient training of them. But the thing that kind of gets me, I guess, about this announcement is that, yeah, it was announced as you, you referred to Rick. It was announced simultaneously with the Dojo team kind of leaving. So specifically, leader Peter Bannon said he was leaving the company with about 20 other engineers, several of whom went and created a new startup called Density AI. Supposedly Density is going to be coming out of stealth mode relatively soon. So we don't know a whole lot about it, but from what little we do know, it sounds an awful lot, at least to me, like it's going to do kind of what Dojo was supposed to do, just not under Elon Musk. And that mass defection certainly isn't the only high profile departure from a Musk led company. I mean, we had just to pick one Milan Kovac, I guess it was earlier this year, left Optimus, which is their robot effort. So who's to say the defection stop here? I would put it to you this way. You know, you can value this company on its business, which is cars and a little bit of solar, which is kind of another troubled area, or you can value it on all the future pixie dust. And I'm not against assigning value to future potential that is not here today. But if the pixie dust keeps getting blown away, you should probably sit up and take notice.
