Tesla CEO Elon Musk made a number of bold claims about his company’s products at a recent investors event. One of his most notable assertions was that the semiconductors powering his fleet’s autonomous driving systems are the best in the world.
“How could it be that Tesla, who has never designed a chip before, would design the best chip in the world?” said the SpaceX founder.
Fact Checking the Fantastic
Bloomberg recently spoke to Nvidia and the firm disputed Musk’s claims about the capacity and origins of Tesla’s Autopilot chipsets. For instance, the billionaire noted Tesla vehicle computers using the company’s own semiconductors are capable of running 144 trillion operations per second (TOPS). He also said that the carmaker’s old Nvidia-based systems had an output of 21 TOPS.
Nvidia argues that Musk made a false comparison. The semiconductor producer explained the automotive firm’s old systems only provided driver assistance and only used one chip. Conversely, Tesla’s new autonomous driving programs employ multiple chips as they are intended to replace human operators entirely.
Nvidia states its multichip driverless car application provides 320 TOPS to Tesla’s 144.
The Virtues of Simulation
Musk also slammed Nvidia for training its autonomous artificial intelligence (AI) systems in simulated environments. He contended that real-world driving conditions are more complex than any simulation, so Tesla’s practice of field testing Autopilot is more effective.
Nvidia pushed back on that claim and underlined the benefits of educating self-directed automotive systems virtually offers several benefits. For one thing, programmers can repeatedly put AI through a wide range of adverse conditions with minimal setup. More importantly, though, the microchip fabricator noted real human drivers don’t die in simulated driving tests.
To date, three people have been killed while operating Tesla vehicles when Autopilot was engaged.
The Secret of Tesla’s World-Beating Semiconductors
Lastly, Nvidia took issue with Musk’s claim that Tesla independently produces its own semiconductors. In truth, the company outsources the production of its microchips to industry leader Samsung. Because of that arrangement, the electric car maker doesn’t have to pay hundreds of millions of dollars to manufacture, test, and produce its Autopilot chipsets.
Notably, the larger technology market didn’t take kindly to Musk’s braggadocio. A Roth Capital Management analyst said that the billionaire executive “misrepresented” the quality of Nvidia’s chips. Similarly, a Lynx Equity Strategies analyst plainly stated, “Tesla is not a semi-company.” Furthermore, the carmaker’s shares actually fell after its investors’ event while Nvidia’s rose.
Obviously, Tesla is a very successful company that has provided hundreds of thousands of people with cars they love. However, the corporation invites unsavory comparisons when it boasts of doing things that are beyond its capacity.
The reality is, outsourcing microchips isn’t like outsourcing customer service. Creating electronic components, especially components for millions of consumer products, requires infrastructure, expert personnel, and a well-maintained supply chain. Moreover, Apple’s recent surprise settlement with Qualcomm is an excellent reminder that not all semiconductors are created equal.
When a CEO trashes an entire industry on specious grounds to highlight its own offerings, they lose credibility. Put another way, Elon Musk doesn’t sound like Tony Stark when he brags about his firm doing things it can’t actually do, he sounds like Elizabeth Holmes.