Musk promised to compete with Nvidia. Whether it is possible remains to be seen

Elon Musk made another big promise this week, while his earnings report was unimpressive, sending Tesla shares down more than 7%. He then exited the call and didn’t recover his losses all week.

Tesla’s CEO said the company will “double down” on the development of its Dojo supercomputer, hoping to compete with chip giant Nvidia.

“We see a path to being competitive with Nvidia with Dojo,” Musk told investors and analysts on Tuesday’s call. “And I think we have no choice because Nvidia demand is so high, and their clear obligation is to essentially drive the price of GPUs up to a level that the market will bear, which is very high. So I think we really need to make Dojo work, and we will.”

This isn’t the first time Musk has made big promises about what his technology can do without any certainty that it will deliver. And it’s unclear whether he’ll deliver on that promise.

Musk first mentioned Dojo, a supercomputer designed to improve Tesla’s Full Self-Driving (FSD) technology, in 2019. While the company has invested heavily in the incredibly powerful training computer and related hardware, analysts agree Dojo can’t compete with Nvidia yet.

The most optimistic investors, such as Wedbush analyst Dan Ives, believe Tesla is just beginning a new chapter in its “growth story” by investing in AI. While Musk has big goals for AI technology, Ives predicted in a recent company report for Tesla that “that vision is within reach.”

Nvidia, founded in 1993, has a dominant market position with a market capitalization of $2.78 trillion. And demand for its GPUs is so strong (customers include Tesla and Musk’s xAI) that CEO Jensen Huang had to assure analysts that the company was doling them out fairly.

Roey Kosover, director of investment fund FinYX Fund SPC, told Investing.com that shareholders have benefited greatly from Musk’s business, but “some of his claims are not always accurate.” He estimated that Dojo has a potential run that is about 10 years behind current powerhouse Nvidia, and that Nvidia has an “incredible record of continuous growth and expansion.”

“So maybe his recent claim that Tesla Dojo will compete with Nvidia shouldn’t necessarily be taken at face value,” Kosover told the outlet, adding, “Where Nvidia is now is not where it will be in the future if and when Dojo has the opportunity.”

Representatives for Tesla and Nvidia did not immediately respond to Business Insider’s request for comment.

Responding to questions about ongoing delays to Tesla’s Robotaxi project, Musk admitted during Tuesday’s call that his predictions “have been overly optimistic in the past.”

Through his various business ventures, Musk has made great strides in turning electric vehicles into status symbols, innovating space exploration with his reusable rockets and low-Earth orbit satellites with Starlink. But while the billionaire has big dreams of innovation across industries, he’s hit a dead end — when his ideas even make it to market.

Musk in 2016 promised that Tesla would have fully functional FSD technology within two years. In 2019, he predicted that regulatory approval for his still-undisclosed Robotaxi project would take about a year. In 2014, he estimated that SpaceX would take humans to Mars by 2024. The startup that attempted to implement Musk’s 2013 hyperloop idea was shuttered last year.

It is not yet clear whether Musk’s planned competition with Nvidia will meet the same fate.