Tesla (TSLA) -) is reportingly constructing a new bunker of sorts at its Austin, Texas headquarters. The facility, according to The Information, will house part of Dojo, the new supercomputer that Tesla has been designing to enhance its artificial intelligence efforts.
This enhancement of Tesla's supercomputing efforts could eventually allow Tesla CEO Elon Musk to compete in yet another vertical: cloud computing.
“Dojo also has the potential to become a sellable service that we would offer to other companies in the same way that (AMZN) -) Amazon Web Services offers web services, even though it started out as a bookstore," Musk reportedly told investors in April. "So, I really think that yes, the Dojo potential is very significant.”
Related: Jeff Bezos Makes a $120 Million Move Against Elon Musk
The potential of Dojo is one that investors and analysts are beginning to notice. Morgan Stanley in September lifted its 12-month Tesla price target by 60% to $400, something that would boost the company well over the $1 trillion market cap mark.
Morgan Stanley analyst Adam Jonas said that the company's Dojo supercomputer, by speeding up Tesla's robotaxi efforts and enhancing the sellability of its software and services, could add close to $600 billion to the value of the company.
Tesla first unveiled Dojo last year and plans to spend more than $1 billion, including research and development costs, on it through next year.
Jonas said that Dojo could allow Tesla's business to "extend well beyond selling vehicles at a fixed price."
"If Dojo can help make cars 'see' and 'react,' what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its visual field."
Jonas' perspective of Tesla as a tech company that happens to be in the business of cars is one that is shared by both Cathie Wood of Ark Invest and Wedbush analyst Dan Ives.
Tesla did not respond to a request for comment.
Related: Here's why the Tesla bears are very wrong, according to Wedbush analyst Dan Ives
Amazon's cloud compute model
Amazon Web Services (AWS) launched quietly about a decade ago and has since become the largest cloud provider out there. The cloud services subset of Amazon controlled 32% of the market in 2022, a number that has stayed relatively consistent over the past few years.
AWS sales increased 29% year over year in 2022, bringing in more than $80 billion in revenue. The cloud segment boasted an operating income of $22.8 billion for 2022, compared to $18.5 billion in 2021.
The cloud services market, according to Allied Market Research, was worth $550 billion in 2021, a number that is expected to hit $2.5 trillion by 2031.
Shares of Tesla, up 116% for the year, rose more than 3% Tuesday.
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