Tesla Poised to Benefit from AI Race and Embodied AI Developments
Amidst concerns over Chinese AI firm DeepSeek's impact on US tech giants, the renewed focus on AI and its applications presents potential opportunities for Tesla.
Morgan Stanley's Adam Jonas highlights the significance of DeepSeek's R1 reasoning model, which reportedly surpasses OpenAI's ChatGPT. This development has sparked questions about intensified global AI competition and the implications for computational efficiency and national security.
While DeepSeek and ChatGPT primarily operate in the realm of chatbots and virtual assistants, Jonas believes that "embodied AI" — physical objects leveraging AI for functionality — holds the greatest potential in the AI domain.
Tesla's advancements in AI, driven by both external innovations and internal R&D, will enhance the capabilities of its self-driving and Robotaxi vehicles deployed globally. The company's extensive collection of visual data will also prove valuable in training vision-based AI models for embodied robotics.
Jonas emphasizes the role of electric mobility in promoting AI leadership, suggesting that Tesla's expertise in EVs positions it to leverage the opportunities presented by embodied AI.
The heightened interest in embodied AI also aligns with Tesla's growing optimism regarding its Optimus robot. Embodied AI will power Optimus, and the renewed focus on AI development could accelerate the growth of this business segment for Tesla.
Jonas maintains Morgan Stanley's Top Pick rating for Tesla in the automotive sector, setting a price target of $430. The renewed emphasis on AI, particularly embodied AI, serves as a positive catalyst for the company's long-term growth prospects.