Elon Musk is the visionary entrepreneur behind Tesla, SpaceX, and Neuralink. Long recognized for his ambitious plans and future-thinking, he now deems it an "AI, robotics company". Thus, making it more than a basic automaker.
It is this strategy, which has been sparking huge debate, raising the question of whether Elon Musk’s AI strategy putting Tesla at risk.
This thrust into AI for Tesla began with the launch of its Full Self-Driving or FSD technology. Musk believes that full autonomy in vehicles is only possible through an integration of AI. Thus, he has invested heavily in this area.
Most significantly, at the centre of Tesla's AI strategy is its in-house supercomputer, ‘Dojo’. Dojo has been constructed to train the neural networks behind the FSD system. This comes as no surprise as Musk maintains the vision of a 'fleet of robotaxis' operating completely unmanned.
However, this development is a very ambitious transition that beckons many core questions about the company's operations and general strategy.
However forward-looking Musk's AI strategy seems to be, it comes at a grave cost. That is a distraction from Tesla's core business of producing electric vehicles. This is because, in the past few years, Tesla's products have undergone little innovation, save for the new niche Cybercab.
Consequently, the profitability of the company is shrinking. The sales numbers are significantly below the peer group in key markets, specifically China. The critics argue that Musk’s focus on AI and robotaxis may divert critical assets and attention away from fundamental business problems.
The uncertainty and complexity of AI development poses yet another risk. Achieving full autonomy in vehicles is a tremendous task. It doesn’t help that Tesla's progress rate has also been slower than what had initially been anticipated. Much has been reported on the setbacks and delays of its FSD technology, and there is heavy lifting to be done concerning technical issues. If Tesla fails to deliver its AI promises, it could hurt the company's reputation and sully investor confidence.
Change from traditional automaking to AI-driven solutions does, therefore, need several types of different expertise and skills. Care needs to be taken by Tesla in managing the risk of alienating the current workforce and stakeholders for such changes.
If the company can develop and deploy its autonomous vehicles into the market, it will completely revolutionise the transport industry. Creating robotaxis opens a new and diversified source of revenue for the company. Hence, placing Tesla in the most powerful place in the market of autonomous vehicles.
In addition, the companies importing the FSD feature in their products will enjoy the extensive data collected by the automobiles of Tesla. This kind of data-based strategy supports the tremendously increasing big data phenomenon, which is already being applied in innovation in every field.
The strategy of Elon Musk through AI is an audacious move that might change Tesla and the transportation sector. However, it poses significant risks, including potential dilution of the company's focus on its core business and uncertainties inherent in AI development. One thing is for sure thought that this is going to encourage the rampant use of technology and transportation. The decisions taken today would heavily influence Tesla's future and its various stakeholders.
Therefore, as the company continues to muddle in this complex minefield, only history will show whether Musk's vision will see the light of day or backfire.