Tesla Stock Falls After Unveiling Its $1 Billion Supercomputer Project

Tesla shares fell by almost 9% Thursday, a day after Elon Musk told investors and analysts that the company expects to spend more than $1 billion on Project Dojo by the end of 2024. 

Project Dojo is a supercomputer designed to handle massive amounts of data, particularly video data from Tesla cars, as the company looks to develop advanced autonomous driving software for its fleet of electric vehicles, according to a report by Bloomberg.

“We will be spending well over $1 billion on Dojo” over the next year, Musk said during Wednesday's conference call with auto analysts. The Austin, Texas-based company already has a supercomputer, the Nvidia GPUs, according to the Verge. 

The Dojo computer and its chips will be designed by Tesla and employed as an AI machine-learning tool focused primarily on training its fleet of autonomous vehicles.

News of the project's cost caused a 4% drop in Tesla shares after Wednesday's market close. The slide continued Thursday as the company's stock continued to fall in the afternoon. Wall Street analysts Alpha Spread forecast that Tesla's stock price will continue to drop over the next 12 months.

Tesla Chief Financial Officer Zachary Kirkhorn aimed to address analysts' concerns during Wednesday's call with analysts, saying that the costs associated with Project Dojo are in line with Tesla's expense outlook for the next three years.

Musk added that Tesla has a “staggering amount” of video data available because of its customers' use of the company's autopilot camera-based driver-assistance system and its full self-driving beta feature. Both have accumulated over 300 million miles of data, Musk said, which will help Tesla's efforts as the EV carmaker moves towards a full self-driving future.

In its latest earnings release on July 19, Tesla said it has started manufacturing its Dojo training computer.