The disbanding of Tesla’s Dojo efforts follows the departure of around 20 workers, who left the automaker to start their own AI company dubbed DensityAI focused on data center services for industries.

In a response to the Bloomberg report on X, Tesla CEO Elon Musk said, "It doesn’t make sense for Tesla to divide its resources and scale two quite different AI chip designs. The Tesla AI5, AI6 and subsequent chips will be excellent for inference and at least pretty good for training. All effort is focused on that."

Samsung Electronics USD 16.5 billion deal to manufacture Tesla next-generation AI6 processors has gained new weight after Tesla shut down its Dojo supercomputing team, a move widely seen as a sign the electric carmaker will lean more on external chip partners.