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Tesla looking to use China data center in self-driving push: Rpt.

Tesla (TSLA) has been trying advance its self-driving technology in China, but it needs to comply with local regulations. As part of its push, the company is looking to process data gathered in China at a Chinese data center in order to avoid running afoul of regulators. According to the report from Reuters, the company has also been trying to secure approval to transfer data outside of the country for processing.

Yahoo Finance Autos Reporter Pras Subramanian explains why this is an important move for Tesla.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Stephanie Mikulich.

Video Transcript

Tesla is reportedly moving ahead with its plans to build a data center in China.

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It could be used to help develop the self driving algorithm that is according to reporting from Reuters.

For more, we're going to bring in our very own pro Romanian.

This is a really big deal.

What do we know so far?

Well, it's actually a bit wrinkle here.

It's not much of they're building a data center is that they're actually using the data there and they can't bring it to the US, they had to or or or already have a data center in China for their, you know, the the local regulations about data collection.

So the the key was is that Musk wanted to bring all that data from the, from China to the US to train the self driving A I ALGO, right?

Can't do that.

So now according to Reuters is reversing course and said, OK, we'll we'll build well, data center stays here, the data stays here.

We'll train the algorithm in China.

I mean, it's it's important because that's where the most cars in the world with, with, with the FSD type sensors are in China.

Um you have also have a lot of mapping technology or a lot of other partners there that are, that are gonna share data.

So he's saying potentially, what if we train the Algo there in China and then take that information and spread it elsewhere, right?

That's sort of like the kind of the, the pivot here.

Uh There's some risk there, you know, with, with China, you never know when they can lock you down, you never know when they can say, you know what we're gonna stop you here.

So it's, it's kind of a risk.

But also I think he sees that as an opportunity, you know, they use the the Reuters article notes that China Giga factory became the leading factory there for them.

And that wasn't necessarily going to be the case when people thought about them creating that factory there.

So maybe China is the push, maybe China is the sort of the angle for where they're going to attack FSD.

Is this a strategy that you think?

Do analysts think that it makes sense in terms of Tesla's longer term goals in trying to increase that widespread adoption?

II I, yeah, I think there's two parts, right?

I think, yes, because it's a big market, there's it's sort of widely mapped other players like Baidu already doing that stuff there and you can kind of work together with.

But the problem is that they, they don't necessarily own the data potentially, right?

Also, there's a mention of how you can't sell these NVIDIA chips in China because they're, they're banned.

So how do you get around that?

They need those chips to, to build a data center and to train the allo.

So um but yeah, I think they're right, there is an opportunity but also some risk.