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At Tesla’s headquarters in Austin, Texas, a new bunkerlike structure is under construction that could one day help move the company beyond electric vehicle manufacturing.

When it’s completed, the building will house part of a new supercomputer, known as Dojo, that Tesla is assembling to help run the artificial intelligence software behind the self-driving capabilities in its vehicles, according to two people familiar with the project. Eventually, Tesla could use Dojo to sell cloud services to other companies, the way Amazon Web Services does, the company’s CEO, Elon Musk, has said.

THE TAKEAWAY

• Tesla is building space in Austin to house its Dojo supercomputer

• Elon Musk has said Dojo could become an AWS-like cloud service

• Tesla is planning an assembly line to make robotaxis and a $25,000 car

The Austin Dojo project, details of which haven’t been previously reported, reflect an audacious plan by Musk to take greater control over the technology it needs to run the AI software at the heart of its products. Musk told investors in July that the company plans to invest “well over” $1 billion in developing Dojo by the end of 2024. The supercomputer—the first machines of which Tesla began using in a data center in Palo Alto, Calif., in the summer—is based on a chip designed in-house by Tesla. That could lessen Tesla’s dependence on Nvidia, the dominant supplier of the graphics processing units used to run AI applications, whose products the electric vehicle maker also uses.

Tesla already uses Nvidia AI chips to power the full self-driving software inside its fleet of Tesla vehicles, which feed video data from cameras on the cars back to the company. Tesla then uses that data to train the systems in its cars to better recognize their surroundings. But the company’s demands for AI computing power are expected to increase significantly as it adds new types of vehicles to its portfolio of products.

Inside Tesla's Texas gigafactory. Photo by Suzanne Cordeiro/AFP via Getty

For example, in the coming years, the company plans to build a robotaxi and a new entry-level Tesla expected to cost around $25,000, both of which it has long discussed. Tesla recently began detailed planning in Austin to build its next-generation assembly line—code-named NV9X—on which it plans to manufacture both the robotaxis and entry-level Teslas, according to people close to the project.

In April, Musk told Tesla investors: “Dojo also has the potential to become a sellable service that we would offer to other companies in the same way that Amazon Web Services offers web services, even though it started out as a bookstore. So I really think that yes, the Dojo potential is very significant.”

Some Wall Street analysts have come to see Dojo as a big reason to be bullish on the company’s stock. Last month, Morgan Stanley analyst Adam Jonas predicted that Dojo could add up to $500 billion to Tesla’s enterprise value. Jonas based his forecast on an argument that Dojo could help Tesla realize its robotaxi ambitions and bring in new revenue from sources beyond the auto industry. He said Dojo customers could include companies that use vision-based computer learning, including businesses involved in robotics, aviation, railways and facial recognition, according to the report.

Chip Shortages

For Tesla, one wrinkle in those plans is that the kinds of chips required to run computers like Dojo are increasingly hard to come by, in large part because the primary supplier for them, Nvidia, is overwhelmed with demand.

”Everybody who is trying to do this is complaining that they can’t get enough of these chips,” said Glenn O’Donnell, a semiconductor researcher at technology research firm Forrester.

That’s a big reason why Tesla was motivated to design its own AI chip, known as D1. Other major tech players such as AWS and Microsoft have also begun designing their own AI chips to reduce their reliance on Nvidia. In July, Musk said Tesla would have continued to rely exclusively on Nvidia if the chip manufacturer’s supply could keep up with his company’s ambitions. In the future, the company plans to continue using Nvidia chips, along with the D1 chips that power Dojo, he said.

Press in Taiwan reported last month that Tesla had doubled its order for D1 chips with Taiwan Semiconductor Manufacturing Co., which is manufacturing them for Tesla.

Cost savings is also another important factor in Tesla’s decision to design its own chip. The D1 processor will give Tesla more control over how much energy it uses to run its AI software, Morgan Stanley’s Jonas wrote in his report. The company may also be able to process video data faster than with the Nvidia chips, he wrote. Tesla has said it expects Dojo to enable the company to train full self-driving workloads—discrete tasks or applications—in one week, a process that previously took a month, though those claims are yet to be proven. Morgan Stanley estimates that Tesla could save $6.5 billion over the next couple of years by designing its own chips rather than relying on Nvidia.

Tesla will need more and more physical space to accommodate Dojo’s growth. The company, which is headquartered in Austin and has engineers in California, has said it plans to use its Palo Alto data center to house seven ExaPods—a Tesla term for a cluster of 10 refrigerator-size cabinets brimming with Dojo computers running on D1 chips.

A year from now, Tesla has predicted, its Dojo computing capacity will increase to the equivalent of 100 ExaPods. That growth is likely one reason the company needs a second home for Dojo.

Long term, other Tesla businesses could drive additional demand for AI capacity. In July, Musk told Tesla investors the company is already in “early discussions with a major OEM,” an original equipment manufacturer, about licensing its full self-driving system to it. That could be another maker of commercial or consumer vehicles, though Musk didn’t specify what he meant by the term.

“We’re not trying to keep this to ourselves,” he said, referring to Tesla’s full self-driving software.

In his report on Dojo, Morgan Stanley’s Jonas also said Tesla could use Dojo to run the software behind a humanoid robot it is developing, Optimus. He speculated that other Musk companies, such as X and SpaceX, could buy services from Dojo.

Here’s a shoutout to those tech folks—among many, many others—who are putting their lives on the line as members of Israel’s defense forces right now, responding to the Hamas attack over the weekend. It puts everything else into perspective. For more details on Israeli tech folks’ involvement, see our story here.

Meanwhile, Nelson Peltz has jumped back into the Disney fray, eight months after he abandoned his last threat of a proxy fight. Since then, Disney stock has plunged 27% to a low of around $80 last week, as the challenges facing the entertainment industry have deepened. Peltz now wants several seats on the entertainment company’s board, according to a report in The Wall Street Journal. If he doesn't get them, he may mount a new proxy contest, the WSJ said. He believes Disney shares to be “significantly undervalued” and thinks the company needs a “more focused” board that is aligned with the interests of shareholders. Peltz’s views about the board sound suspiciously like blather. There’s no doubt Disney stock is ridiculously cheap, although it doesn’t take a Wall Street genius to figure that out.

After all, the last time Disney stock has traded around $80 was in 2014! More significantly, consider that in August, research firm MoffettNathanson estimated the value of Disney’s theme park and consumer products business to be around $71 a share, based on prevailing valuations of other theme park and cruise ship stocks. In other words, the market is now putting very little value on Disney’s vast entertainment businesses. Some of those businesses are deeply troubled, given how cord cutting has laid waste to the once-powerful ESPN business. But Disney’s streaming operations and its film studios, not to mention its library of content, are enormously valuable. The declining traditional TV networks have some value. In other words, at current prices, Disney is a screaming buy.

It makes sense, then, that Peltz has been accumulating more shares. What doesn’t make sense is the idea that he would mount another proxy fight if he doesn’t get offered seats on the board. After all, it’s not like CEO Bob Iger is sitting on his hands. Iger has dropped strong hints that he is open to selling the ABC television network and some of the cable channels, and at least partnering on ESPN. He has slashed costs and is raising prices on streaming. Iger is far from perfect, but he should be credited with being more upfront about the problems facing entertainment than most other executives in his position. It’s hard to imagine anyone else could have done a better job at dealing with Disney’s myriad struggles.

You could argue that Iger should be more open to selling Disney entirely, but he hasn’t ruled that option out. All he has done, when this came up on the last earnings call, is point to the global regulatory climate, which is a real obstacle to a sale. Otherwise, various restructuring options appear to be on the table. Iger is showing every sign of understanding the urgency of fixing Disney. Maybe the company should give Peltz a single board seat—that he can occupy himself—just to shut him up, although it’s doubtful he can contribute much of any value.

Riccitiello’s Disunity

You can always tell when a CEO’s exit hasn’t been planned. For one thing, there’s no replacement lined up and someone is appointed temporarily to fill the job. In the case of game engine developer Unity Software, which announced the sudden departure of CEO John Riccitiello on Monday, the situation is even more stark. Its board found an outsider to come in as interim CEO. In other words, there wasn’t someone inside who could take the job, even for a little while.

Private equity firm Silver Lake, one of Unity’s biggest shareholders, surely played a role in the decision. The temporary replacement is James Whitehurst, a former Red Hat CEO who is currently a special adviser to Silver Lake, although he also serves on various boards.

The sudden ouster of Riccitiello follows reports of an outcry among software developers over a new pricing model he announced in September. The New York Times reported earlier this month that developers have threatened to leave Unity over the new pricing model. Unity’s exposure to mobile developers increased after its acquisition last year of ironSource, an Israeli firm that makes tools to help mobile developers build their businesses. Unity’s stock price has fallen 37% since mid-July as investors panned the deal.

This is the second time Riccitiello has departed a top tech job under a cloud. He previously ran Electronic Arts for several years until 2013, when he stepped down as a mea culpa for “shortcomings” in the gaming firm’s financial results that year.

DUBAI, Oct 10 (Reuters) - Tehran was not involved in the militant Hamas group's weekend attack on Israel, Iran's top authority Ayatollah Ali Khamenei said on Tuesday, but hailed what he called Israel's "irreparable" military and intelligence defeat.

"We kiss the hands of those who planned the attack on the Zionist regime," said Khamenei, who was wearing a Palestinian scarf, in his first televised speech since the attack.

"This destructive earthquake (Hamas' attack) has destroyed some critical structures (in Israel) which will not be repaired easily ... The Zionist regime's own actions are to blame for this disaster," said Khamenei.

Israel has long accused Iran's clerical rulers of stoking violence by supplying arms to Hamas. Tehran, which does not recognize Israel, says it gives moral and financial support to the group, which controls the Gaza Strip.

Backing the Palestinian cause has been a pillar of the Islamic Republic since the 1979 revolution and a way the Shi'ite-dominated country has fashioned itself as a leader of the Muslim world.

Burnt out on splashy Nikes and Adidas, a surprising number of sneaker collectors have come to embrace the shoe company’s frumpy Boston clog

This week, Birkenstock will clomp its way onto Wall Street, with an initial public offering seeking a valuation of up to $9.2 billion for the 249-year-old German shoe brand. And as it has evolved from a frumpy, orthopedic sandal maker to a more-than billion-dollar business, Birkenstock has received a boost from a surprising source: jaded sneakerheads who have become smitten with its plump, closed-toed Boston clogs.

“I like to keep something like a Boston in my rotation every week instead of just all sneakers all the time,” said Drew Good, 25, who runs a clothing brand and does content creation in Miami.

Like a bed bug outbreak, there is an infectious sneaker fatigue coursing through the streetwear world. The onslaught of new Nike releases and gotta-have-it Adidas have spurred many collectors to cry enough.

“The market, especially with Dunks or Jordans, is just oversaturated completely,” said Good. “People are looking for a different silhouette on foot—different feel, different comfortability.”

Good has embraced the stubborn Boston, with its cork footbed, which has scarcely been altered since its debut in 1976. She now owns three pairs of Birkenstock’s backless cup-fronted clogs, getting the most miles out of a mocha-y brown pair.

It has been a heady few years for the gray-bearded shoemaker. In 2021, Birkenstock was acquired by L Catterton, the private-equity firm backed by French luxury giant LVMH Moët Hennessy Louis Vuitton. Financial success has followed. In the fiscal year 2022, its revenue totaled €1.24 billion (around $1.31 billion), a roughly 70% increase from two years prior.

Through that period Birkenstock basked in a pandemic-era push toward comfort shoes that hasn’t faded. (Other beneficiaries include Hoka and Crocs.) Birkenstock has also gone headlong into the high-end collaboration market, cozying up with luxury imprints like Dior and Valentino on coveted pricey clogs and sandals. Oh, and a pair of its strap sandals made a cameo in “Barbie,” the year’s biggest film, representing enlightenment in contrast to the ditsy ignorance embodied by a glistening pink heel.

The hypebeasty embrace of the Boston clog is thus just one recent success for the shoe company, but for that particular sliver of the fashion world, it marks a significant shift in taste.

“There’s this appetite from customers and sneakerheads to have a more diverse set of products in their closet,” said Drew Haines, merchandising director of sneakers and collectibles at StockX, an online resale marketplace, which has seen triple-digit growth of Birkenstock sales for the past three years.

On StockX, Birkenstock is nudging its way in with the Nikes of the world. It is now the second fastest-growing shoe brand on StockX, with particular demand for the Rubenesque Bostons, a shoe previously associated with hikers and health food store owners.

Hypebeasts may be squeamish about baring their toes—in interviews few reported to be fans of Birkenstock’s two-strap Arizona sandals. Birkenstock’s IPO filing notes that closed-toed styles make up over 20% of its total revenue. On Birkenstock’s website, cork Bostons start at $120. Through a representative Birkenstock declined to comment for this article.

Drew Joiner, a 26-year-old content creator who makes YouTube videos about men’s fashion (including videos such as “The Trendiest Sneakers for Summer 2023”) used to think of Birkenstocks as “Jesus sandals.” Yet all those hours spent shuffling around his house during the pandemic swayed him to shift away from sneakers and grab a pair of Bostons.

He found the shoes’ cork footbed “really uncomfortable at first,” but in time, it molded to his feet, a supportive feeling quite different from the sneakers he was used to. He now wears Birkenstocks regularly—during a recent interview, he had a pair of wide-strapped, open-toed Kyoto sandals on. Birkenstocks, he said, are “an acquired taste like certain wines.” A YouTube video he made titled “3 Things you NEED to know before buying Birkenstock Bostons” has been viewed over 206,000 times.

As converts have caught on to the cork, Birkenstocks have ignited a sneaker-esque hype cycle of their own. Mule Boyz, a 4-year-old Instagram account dedicated to highlighting the latest in backless footwear innovation, has over 41,000 followers. Nordstrom has hosted two in-store “Birkentalks” with the Mule Boyz and Birkenstock, attended by many mule-wearing millennials. (Jian DeLeon, the store’s men’s fashion director, co-runs the account.)

Swipe through @MuleBoyz and sandy Birkenstock clogs will appear time and time again. A post from July showing a pair of customized mint-green Boston clogs includes comments like “Need a pair!!!” and “Yesssss.” Not bad for a shoe that was introduced when Peter Frampton was dominating the Billboard charts.

Elizabeth Venter, 29, who owns a vintage resale business in New York City, purchased a pair of Boston clogs after seeing a friend’s sister post her pair online. She got hooked and has worn the shoes nearly every day since. She also became something of an online mule evangelist, creating TikTok videos and Instagram posts about how to style the Boston.

“TikTok and Pinterest are the biggest drivers right now of fashion trends,” said Venter, noting that Birkenstocks are particularly hot on these platforms. “Everybody that I know through the internet owns Boston clogs.”

The social-media generation has helped the orthopedic shoe brand shed some of its Deadhead funk. According to its IPO filing, 43% of the brand’s consumers are either millennials or Gen Z.

Still, Venter hears from detractors who say the doughy shoes are ugly or look like potatoes. She concedes they have a point: “Of the prettiest shoes in the world, I wouldn’t pick them,” she said. But in these anti-fashion times, when hole-riddled baggy jeans and gaudy gas station sunglasses are on trend, endearingly frumpy Birkenstocks have an edge. “When I get dressed I’m not like, ‘Oh, what’s the prettiest thing I could put on today,’” said Venter.

Birkenstock’s turn toward being fashionable is not entirely organic. In recent years, it has been on a collaboration tear, producing clogs and sandals with everyone from the dark priest of high-fashion Rick Owens to the streetwear pioneers at Stussy to the luxury powerhouse Valentino.

These collabs have also thrust Birkenstock in front of a new set of rabid, newness-obsessed shoppers. Hypebeast.com, the internet’s landing page for all things streetwear, went from scarcely covering Birkenstock at all as recently as six years ago to posting repeatedly about the $1,100 buckle-back Dior mules and the corduroy Stussy clogs.

By emphasizing collabs, Birkenstock has actually begun to behave more like a sneaker company. Haines of StockX noted that with its attention-grabbing collaborations, Birkenstock is taking a page from the Nikes of the world. “Anyone can run the playbook if they work with the right brands, the right creators,” he said. For Birkenstock, following that playbook has led them all the way to Wall Street.

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C’était une belle occasion de vanter les avancées du TGV M. Las! le 6 octobre, Henri Poupart-Lafarge a dû se faire porter pâle pour les premiers essais du train du futur, au technicentre de la SNCF à Paris. La veille, le patron d’Alstom avait vu le titre de son groupe, numéro deux mondial du rail derrière le chinois CRRC, dévisser de près de 38% en quelques heures, suite à l’annonce de difficultés de trésorerie sur l’exercice en cours. Il faut dire qu'en annonçant avoir enregistré un flux de trésorerie disponible négatif de 1,15 milliard d'euros au premier semestre et une fourchette allant de -500 et -750 millions d'euros sur l'exercice en cours, le groupe a ravivé les spéculations sur sa santé financière et le risque d'une augmentation de capital. L’alerte était d’autant plus surprenante pour le marché que l’entreprise anticipait des entrées "significativement positives" sur l’année.

10% de croissance par an en moyenne

Certes, avec 3,5 milliards de liquidité, l’entreprise n’est pas aux abois, mais elle souffre d’un décalage de plus en plus flagrant entre les commandes et ses capacités à les honorer. "Il est temps de faire de la croissance rentable, plus ciblée, estime un bon connaisseur d’Alstom, questionnant la hausse d'activité de 10% par an en moyenne de la division "Matériel Roulant" du groupe. Les objectifs sont trop ambitieux. Aujourd’hui la complexité du business fait que la croissance génère des besoins en fonds de roulement excessifs par rapport aux avances de leurs clients. Ils ont par ailleurs surestimé leur capacité d’intégration de Bombardier Transport", racheté début 2021.

87 milliards d'euros de commandes

La demande est en effet très soutenue dans le secteur ferroviaire. Pour honorer un carnet de commandes dépassant désormais 87 milliards d’euros –dont près de 60% engrangés en deux ans et demi–, Alstom doit accélérer la montée en cadence de ses usines, surtout pour la livraison de trains, de RER et de rames de métro. Et pour éviter toute rupture d’approvisionnement, il constitue des stocks coûteux.

Dans le même temps les retards s’accumulent. La livraison de 443 trains périurbains électriques Aventra à différents opérateurs au Royaume-Uni, un contrat hérité du portefeuille de Bombardier, n’est pas attendue avant 2024-2025. Privant de facto le constructeur de certaines avances de trésorerie. Pour autant, Alstom connaît aussi des retards sur d'autres programmes venus de son propre portefeuille. Les choses se corsent ainsi aux Etats-Unis où le Français a signé en 2016 un contrat de 1,8 milliard d’euros pour fournir des rames à grande vitesse entre Boston et Washington qui devaient entrer en service en 2022. Or les Américains ne cessent de réclamer des améliorations techniques pour homologuer les trains.

Près d'un an de retard pour le TGV du futur

En France également, le TGV M n'est pas loin d'accuser un an de retard. Les premiers exemplaires de cette nouvelle génération sont attendus par la SNCF vers mi-2025. C'est aussi le cas pour les nouvelles rames de RER B, qui ont encore pris 13 mois de retard et n'arriveront pas avant 2027.

Malgré les mauvaise nouvelles, la direction du groupe reste sereine. "Nous avons confirmé nos prévisions de profitabilité, entre 8 et 10% en 2025-2026, avance-t-on en interne. Quant aux contrats non rentables hérités de Bombardier, ils sont en majorité derrière nous." Reste un niveau de dette annuelle nette –3 milliards– trop élevée. Si l’augmentation de capital crainte par les marchés n’est pas à l’ordre du jour, elle n’est pas pour autant complètement écartée par le constructeur, ni la réalisation d’éventuelles cessions d’actifs.