Shanghai's Data Policy Shift Could Propel Tesla's Local Data Center Efforts

Shanghai's new data-export policy could accelerate Tesla's plans to build a local data center, enhancing its artificial intelligence (AI) development for autonomous driving.

China's Regulatory Update

As China attempts to attract foreign investment to stimulate a sluggish economy, Shanghai has reportedly compiled a list of data that can be transmitted overseas without security assessments, according to a government document obtained by Reuters.

Earlier reports stated that Tesla had started preliminary discussions regarding constructing a data center in China to train its autonomous driving AI. Two individuals, who requested anonymity due to the confidential nature of the work, claim that Tesla has been formulating strategies for establishing a data center in China to train the algorithm necessary to develop completely autonomous vehicles in the future.

Shanghai, China's bustling market and business capital, has taken a significant step in data regulation. The government has meticulously assembled a preliminary compilation of 'ordinary data' in three key sectors—intelligent and connected vehicles, mutual funds, and biomedicine. The document highlights that these sectors require the least regulation for data transfers, a strategic move in China's economic landscape.

Pilot Program in Lingang Area

Companies operating in the city's free-trade Lingang Area, home to Tesla's Shanghai factory, have been granted a unique opportunity. For one year, they can now transfer data on the list overseas without undergoing additional security assessments.

This privilege is part of a pilot program, a testament to China's commitment to fostering a favorable business environment, as revealed in a document distributed to companies at an event in Shanghai where the white list was announced.

Insights on Tesla's Data Needs

Electrek shared its thoughts regarding this recent development. It elaborates that Tesla will require a substantial amount of video footage from its vehicles in China to train its Full Self-Driving neural networks for use on Chinese roads. The government appeared to harbor apprehensions regarding the potential exportation of these recordings overseas.

"Therefore, I wouldn't be surprise if this report turns out to be true," the EV-focused publication added.

Nvidia and US Sanctions Impact

Tesla would need to collaborate with a Chinese collaborator to establish a data center in China for FSD development. Additionally, sourcing hardware may be a challenge.

According to a source with knowledge of the discussions, the company has reportedly talked with Nvidia about purchasing graphics processing units for a data center in China. U.S. sanctions prohibit Nvidia and its partners from distributing their most advanced processors in China.

Nvidia refrained from providing an update on whether or not it had engaged in negotiations with Tesla.

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