This bold and risky move into AI answers the perennial question of whether Tesla is a car manufacturer or the technology company behind it.

Fortune said that auto industry leaders have long invested heavily in rejuvenating one of the oldest product lines in the field. For example, Tesla’s rival BYD is rolling out one new car model after another with the help of a team of 90,000 car engineers.

Meanwhile, Musk considers his electric cars to be like the “iPhone of the car industry” with the desire to turn it into a high-end device with highly profitable software.

However, that approach is not effective when Tesla has to continuously lower car prices to stimulate sales and maintain the production line. Recently, Musk even had to reduce the cost of FSD software by 1/3.

China’s new electric vehicle models are also putting pressure on Tesla, as the company faces many problems.

Although Tesla CEO has repeatedly predicted that the company’s cars will be able to drive completely without supervision, this has not yet happened. Therefore, this new FSD v12 software is expected to be a potential game changer.

Unlike previous tests, this software operates entirely by AI without the need for pre-programmed commands. Initial customer feedback was very positive, motivating Musk to quickly purchase large quantities of AI chips.

In the first quarter of 2024 alone, Tesla spent more than $1 billion on AI training, doubling the processing capacity of the machine learning system to the equivalent of 35,000 Nvidia H200 chips. Last week Musk announced that this number would reach 85,000 chips by the end of the year.

Tesla’s ambition is to become the first company to solve the problem of unattended self-driving cars on a large scale and beat Waymo to control the future self-driving technology copyright market.