Tesla has laid off plenty of workers lately but now one of its top executives is stepping down voluntarily. Andrej Karpathy, who has held the position of Senior Director of AI since 2017 , has announced his departure. Karpathy has been one of the driving forces behind Tesla’s efforts to incorporate driver assistance technology. His resignation comes at a time when the full-self driving (FSD) tech is generating considerable controversy after multiple on-road accidents. TSLA stock has had a difficult morning, falling 2% so far. But this is likely due to broad market forces, not strictly the news from Karpathy.
As of now, Tesla has issued no statements as to who will be taking Karpathy’s place. His shoes will certainly be difficult to fill. According to Karpathy’s LinkedIn profile, his responsibilities centered around leading the “computer vision team of Tesla Autopilot.” As he presented it, this included four core aspects; data gathering, neural network training, “the science of making it work” and deployment in production running on the company’s custom chip. The executive has provided no reasons behind his decision to step down.
What else do we know about Karpathy’s departure? Let’s take a closer look.
A Change in Command
Yesterday, Karpathy confirmed his resignation from TSLA with the following tweet:
It’s been a great pleasure to help Tesla towards its goals over the last 5 years and a difficult decision to part ways. In that time, Autopilot graduated from lane keeping to city streets and I look forward to seeing the exceptionally strong Autopilot team continue that momentum.
— Andrej Karpathy (@karpathy) July 13, 2022
While he did not provide any details on his rationale for leaving Tesla, he later tweeted “I have no concrete plans for what’s next but look to spend more time revisiting my long-term passions around technical work in AI, open source and education.”
Some high profile people have commented on the Twitter thread, including Elon Musk. The Tesla CEO quickly responded to Karpathy’s tweet:
Thanks for everything you have done for Tesla! It has been an honor working with you.
— Elon Musk (@elonmusk) July 13, 2022
In a later tweet, Karpathy praised the team he was part of, emphasizing that he has complete faith in his colleagues to continue developing Tesla’s FDS technology. As Reuters reports, Karpathy’s departure comes at a “critical time as Tesla Chief Executive Elon Musk races to achieve full self-driving capability this year, after missing earlier targets several times.” This year has certainly been wrought with setbacks as Tesla’s AI department has scrambled to stay ahead of deadlines. Last month, the Washington Post reported that Tesla electric vehicles (EVs) running on autopilot software have been involved in as many as “273 reported crashes.”
What It Means for TSLA Stock
Tesla’s autopilot problems have generated enough controversy for investors to be worried. But in a case such as this, it’s important to take a macro perspective. Tesla has issued multiple recalls throughout 2022, one of which was due to an FDS problem. Did this news push TSLA stock down? Not at all. In fact, it continued rising after the story broke. Tesla has proven that it won’t be kept down by hardware problems. While TSLA stock has shed roughly 33% of its value since 2022 began, that is due to broad market forces and problems with production, not the AI setbacks.
As such, it is unlikely that Karpathy’s departure will harm TSLA stock in the short or long-term. While it’s also not likely that Tesla vehicles will be fully autonomous by 2023 as Musk promised, his loft predictions have never held TSLA back by too much. Investors should relax and keep their sights on the upcoming Tesla stock split, not one executive’s departure.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.