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Musk Boasts Tesla Has 'Best Chip in the World'

The CEO's newest big prediction: that Tesla will have self-driving cars on the road next year.

Tesla Inc. (IW 500/99) has started equipping its vehicles with a self-driving computer designed in-house and transitioned away from chips supplied by Nvidia Corp., with Elon Musk offering a big boast to explain why.

“At first it seems improbable -- how could it be that Tesla, who has never designed a chip before -- would design the best chip in the world?” the chief executive officer said Monday at an investor day focused on autonomous driving. “But that is objectively what has occurred. Not best by a small margin, best by a huge margin. It’s in the cars right now.”

Musk, 47, delivered the braggadocio amid detailed presentations by members of Tesla’s Autopilot engineering team, which has spent the last several years working furiously to meet the boss’s aggressive timelines. His newest big prediction: that Tesla will have self-driving cars on the road next year -- without humans inside -- operating in a so-called robotaxi fleet.

Tesla switched over to its own chips and self-driving computer from Nvidia’s for the Model S and Model X about a month ago, and for the Model 3 about 10 days ago, Musk told investors at Tesla’s headquarters in Palo Alto, California. Samsung Electronics Co. will manufacture the chips in Austin, Texas, he said.

Nvidia disputed some of the claims Tesla made in its presentation, saying that the electric-car maker was comparing a whole computer’s performance with that of one chip. A full system based on multiple Nvidia chips would be more powerful than what Tesla showed off, the Santa Clara, California-based company said.

Still, Nvidia did offer praise for Tesla, saying it had just “raised the bar for self-driving computers.”

Tesla shares closed down 3.8%, while Nvidia finished up 1.2%.

By Dana Hull and Ian King

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