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Photo: Joe Raedle/Getty Images

Tesla plans to introduce self-driving taxis in some U.S. cities next year, CEO Elon Musk announced on Monday at a company event for investors, during which it also unveiled a new chip to power its autonomous driving system.

The big picture: Tesla has long proclaimed its ambition to operate fleets of self-driving taxis. But limitations of the company's currently available autonomous driving tech — along with well-publicized accidents involving the limited self-driving technology its cars currently offer — raise questions about Tesla's aggressive timeline.

What's new: At the event, Tesla unveiled a new proprietary chip at the center of its autonomous driving tech that it designed on its own for the first time, and said it's already working on the device's next iteration. Previously, Tesla had been using Nvidia chips.

  • "All Tesla cars being produced right now have everything necessary for full self driving — all you need to do is improve the software," said Musk of the new chip. He told investors they'd be able to test-drive cars with the improved software later during the event.
  • Musk's acknowledgment of the need for improved software is also a nod to the limits of Tesla's current autonomous driving system, which cannot currently handle all aspects of the road without human intervention.
  • Tesla’s robotaxi fleets will be made up of vehicles owned by customers, who will be able to lend them out to ferry passengers when they’d otherwise be idle. Tesla will take a 20%–30% cut on those fares, according to Musk, who described the business model as a cross between Uber and Airbnb.

What's next: Tesla is scheduled to release its latest earnings report Wednesday, with analysts expecting disappointing financial results.

Go deeper:

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Fed chair says low interest rates aren't driving stock market prices

Jerome Powell. Photo: ANDREW CABALLERO-REYNOLDS / Getty Images

Federal Reserve chairman Jerome Powell told reporters on Wednesday that rock-bottom interest rates aren't playing a role in driving stock prices higher, while noting that vulnerabilities to the financial system are "moderate."

Why it matters: The statement comes amid unshakeable stock prices and a Reddit-fueled market frenzy — prompting widespread fears of a bubble and the role monetary policy has played in that.

2 hours ago - World

Biden freezes U.S. arms deals with Saudi Arabia and UAE

Trump struck several large arms deals with Mohammed bin Salman (L) and Saudi Arabia. Photo: Kevin Dietsch-Pool/Getty Images

The Biden administration has put on hold two big arms deals with Saudi Arabia and the United Arab Emirates which were approved in the final weeks of the Trump administration, a State Department official tells Axios.

Why it matters: The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review. That signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.

Dan Primack, author of Pro Rata
2 hours ago - Podcasts

Robert Downey Jr. launches VC funds to help save the planet

Robert Downey Jr. on Wednesday announced the launch of two venture capital funds focused on startups in the sustainability sector, the latest evolution of a project he launched two years ago called Footprint Coalition.

Between the lines: This is a bit of life imitating art, as Downey Jr. spent 11 films portraying a character who sought to save the planet (or, in some cases, the universe).