Tesla To Be The Most 'Deeply Integrated Automotive Company' In The World With AI Day Plans Fully-Implemented, Says Ark

If Tesla Inc (NASDAQ: TSLA) manages to fully implement its AI Day agenda, it would become the most deeply integrated “automotive company” in the world, as per Ark Invest.

What Happened: The Cathie Wood-led investment management firm published its take on Tesla’s AI Day, held Aug.19, and said that “by owning the AI stack - from training silicon to labeling to neural network design - Tesla should be able to iterate much faster than the competition.”

Ark analyst Frank Downing noted, since the Elon Musk-led company is not “hostage to third parties shipping chips or fixing bugs,” it will be “in full control.”

The analysis was buttressed by an infographic that pitched Tesla against its traditional car company rivals and Alphabet Inc’s (NASDAQ: GOOGL) (NASDAQ: GOOG) self-driving unit Waymo.

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Infographic Shared By Ark Invest In Newsletter

As per Downing, Tesla is vertically integrated in segments such as 'Training Computer' and 'Self Driving,' areas where its traditional rivals depend on third parties — same being true for Data Labeling and Simulation.

In 2018, Tesla was outsourcing Training Computer, Self-Driving Computer, and Data Labeling. 

Ark Analyst noted that Tesla is vertically integrated in all segments except Fleet management, an area where Waymo has already achieved vertical integration.

Waymo is the most vertically integrated company after Tesla, while traditional automakers are most dependent on outsourcing.

Why It Matters: Tesla showcased its AI training supercomputer dubbed “Dojo” on AI Day, which Ark noted had roughly twice the “raw performance of the most powerful supercomputer in the world today.”

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The Ark analysts noted the computer was centered around D1, an ASIC designed for AI training, optimizing for low latency and high bandwidth.

“A bespoke compiler designed to harness the D1’s custom instruction set architecture should be able to train Tesla’s neural nets with best-in-class hardware utilization,” wrote Ark.

A highlight of Tesla’s AI Day was the announced-foray into the production of a humanoid robot, the “Tesla Bot,” essentially positioning the electric vehicle maker as a player in Robotics.

Price Action: On Monday, Tesla shares closed 3.83% at $706.30 in the regular session and rose another 0.28% in the after-hours trading.

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