Tesla Is a Major AI Company

By Douglas A. McIntyre Published May 27, 7:25AM EDT

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Tesla Is a Major AI Company — © Tesla Model X rear view (BY 2.0) by Don McCullough

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Tesla may be the world’s first AI-based car company. It already has most of the AI software needed.

Elon Musk’s artificial intelligence (AI) company, xAI, has just raised $6 billion, valuing it at $24 billion. This makes it a direct competitor to industry leader OpenAI. However, Musk already has a major AI player, Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction).

Nvidia Corp. (NASDAQ: NVDA) CEO Jensen Huang told Yahoo that Tesla’s advanced self-driving system, called “full self-driving,” uses Nvidia chips. He added that Tesla’s advantage over all other self-driving systems is that “one of the things that’s really revolutionary about version 12 of Tesla’s full self-driving is that it’s an end-to-end generative model.” Tesla software is upgraded regularly and is currently on its 12th upgrade. Generative artificial intelligence is “a type of machine learning that can create new content using generative models, often in response to prompts.” This includes information such as data collected by Tesla’s car-mounted cameras.

Tesla needs its AI-based self-driving feature to be the best in the world to maintain its market cap. However, its current self-driving version still requires drivers to monitor its activity. In a perfect world, the driver could be disengaged entirely. Self-driving features have not helped increase car sales across the entire industry because they are not indeed “autonomous.”

Tesla’s stock needs a catalyst to recover from a sharp decline. It is down 28% this year, while the S&P 500 is 11% higher. Its rapid sales increases have disappeared, and investors are worried sales will begin to decline. The public’s interest in electric vehicles (EVs) is dropping because of the lack of charging stations, and competition has also heated between large car companies and those based in China. Tesla may have already started to shrink.

Every major car company claims to have some level of self-driving system, but no car can drive itself yet. Tesla’s lead in AI may allow it to be the first in what is viewed as the next generation of transportation.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.