Questions Rise as Tesla Lease Negotiations Continue in Buffalo

BUFFALO, N.Y. — State leaders are raising concerns over Tesla as lease renewal talks are underway. The conversations come after the company, which employs over 1,600 people, is reportedly discontinuing its $500 million supercomputer project known as Dojo.

In January 2024, New York Governor Kathy Hochul touted Tesla’s investment in Buffalo, highlighting the planned supercomputer at a press conference for the University at Buffalo’s AI Center. However, recent reports indicate that the project is no longer happening.

The Empire State Development (ESD) agency released a statement acknowledging the news. “ESD is aware of recent reports about the discontinuation of Tesla’s Dojo project. While the state has not funded Dojo, ESD is contacting the company to understand the potential impacts,” the statement read.

Concerns have grown amid significant staffing changes at Tesla, coupled with CEO Elon Musk’s move to outsource AI development tied to the self-driving Autopilot program, which faces legal challenges. Various websites report Tesla’s communications team has been inactive, adding to the uncertainty.

The state is negotiating a new five-year lease for Tesla’s South Buffalo facility, which was established with over $950 million in state taxpayer funding. The lease was contingent on workforce commitments, which Tesla has met, although the latest negotiations included conditions tied to the Dojo project.

State lawmakers, previously frustrated with Tesla, are voicing heightened concerns following last year’s layoffs and alleged opposition to union formation. Assemblymember Pat Burke expressed his thoughts, stating, “Tesla is not in a strong position right now… We need to open up this process to any other potential partners for the site.”

Senator Sean Ryan added, “This is just the latest example of Tesla failing to deliver on its promises. If those jobs are no longer coming, the state should factor the change of plans into ongoing negotiations.”

In the New York City area, lawmakers have introduced “DOGE bills,” aimed at increasing scrutiny on state engagements with companies like Tesla involved in advanced technology and energy projects. These bills are currently under consideration in legislative committees.