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Mon Sep 18, 2023, 01:16 PM

Two odes to Musk's genius deserve grain of salt

A financial report and a new book seem to give more than the benefit of the doubt to Musk’s gambles.

By Liam Denning / Bloomberg Opinion

This week saw the release of another ode to the genius of Elon Musk, gushingly accepting his pronouncements at face value. Also, Walter Isaacson published a book about him.

Isaacson’s 600-odd page “Elon Musk,” which debuted Tuesday, was beaten to the punch by Adam Jonas, a sell-side analyst at Morgan Stanley. He released a 60-odd page report the previous day boosting his target price for Tesla, Musk’s electric vehicle manufacturer, on the thesis that Tesla is actually an artificial intelligence powerhouse in the making.

As Isaacson’s book chronicles, Dojo, the name for Tesla’s supercomputer moonshot, springs from Musk’s long-running fascination with, and unease about, artificial intelligence. Musk’s early backing of OpenAI, which eventually created the ChatGPT chatbot, evolved into a range of AI-related bets. In Tesla’s case, that is focused on Musk’s long-promised goal of creating intelligent vehicles offering fully autonomous rides that are safer than regular driving by meat with eyes. Dojo’s next-generation custom chips are intended to be the brains of Tesla’s self-driving vehicles and, by Jonas’ reckoning, will perform better at that than the chips on offer from AI hardware darling, Nvidia. On the back of this, Jonas raised his target valuation by almost $480 billion. The same day, Tesla’s market cap jumped by $79 billion, an amount bigger than the individual market caps of roughly 80 percent of the S&P 500’s members.

One could say, I suppose, that the ever rational market is ascribing an implied one-sixth probability to the Dojo thesis, but that would perhaps be overthinking things.


Pump and dump?

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