Elon Musk says Tesla is training a new Full Self-Driving (FSD) AI model

Tesla is working on a major upgrade to its Full Self-Driving (FSD) system, with a new artificial intelligence model that could launch by the end of next month, according to CEO Elon Musk.

Posting on X platform on Wednesday, Musk said the new version of FSD will have around 10 times more parameters than the current model, and will include significant improvements in video compression.

What the new system will offer

The upgraded model represents a renewed push by Tesla to position itself as a leader in autonomous driving technology, even as its core vehicle sales face mounting headwinds. As recently reported by Cryptopolitan, the EV firm is facing headwinds in Europe, with new sign-ups in major markets across the block suffering a decline, even after releasing a new version of the Model Y.

But the automaker is upbeat.

“Tesla is training a new FSD model with 10X params and a big improvement to video compression loss. Probably ready for public release end of next month if testing goes well.”

Musk.

FSD is Tesla’s most advanced driving-assistance system, designed to help vehicles navigate a wide range of real-world scenarios with limited human input. Unlike basic lane-keeping or adaptive cruise control features, FSD aims to make autonomous decisions in complex driving environments, although it still requires drivers to keep their hands on the wheel and remain attentive at all times.

By “10X params,” it means a larger model, which is most likely to have been trained on a wider and more diverse data, and better decision-making as well as overall performance.

Musk also noted a “big improvement” in video compression, key to how Tesla vehicles interpret camera feeds in real time.

According to Tesla, advances in video understanding are critical to enabling full autonomy, especially when navigating urban streets, construction zones, and other visually dense environments.

Autonomy remains key to Tesla’s future

Despite ongoing regulatory and technological hurdles, Musk has long said Tesla’s future depends heavily on autonomy. The company launched its first robotaxi service in Austin, Texas, earlier this year, a signal of where it sees growth opportunities beyond car sales.

“Tesla bulls see autonomy as the company’s most important long-term driver of value,” said auto industry analyst Melissa Chan. “Even if EV demand softens, autonomous tech could unlock new business models, especially in mobility services,” added Chan.

But Tesla isn’t alone in the race. Chinese competitors like BYD and XPeng are also investing heavily in autonomous driving software, and legacy carmakers are accelerating their own AI integration.

The automaker’s business has been under pressure lately despite making several efforts and shifting to the new FSD model. Its year-on-year revenue for the second quarter went down by 16%. One of its key markets, Europe, reported a sharp decrease in sales, raising concerns about overall demand.

Tesla’s share price has suffered as a result, down over 23% this year through Wednesday morning. The company has also dealt with reputational challenges, including a breakdown in relations between CEO Musk and the White House.

Some analysts warn that despite the optimism surrounding autonomy, Tesla needs to stabilise its mainline operations to maintain investor confidence. “FSD can be a game-changer,” said Chan.

“But until it’s deployed at scale and generating steady revenue, Tesla’s bread-and-butter is still the vehicles.” Chan.

Tesla has not provided a specific release date for the new FSD model, but Musk’s timeline suggests it could be available to early users as soon as next month. Whether regulators will allow wider adoption, especially in international markets, remains to be seen.

For now, the company is betting that advances in AI can help shift the narrative back in its favour, even as the road ahead remains anything but fully autonomous.

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