Ex-Tesla Supply Chain Leaders Launch Atomic, an AI-Powered Inventory Solution

# atomic

In 2018, Tesla faced significant challenges scaling up production of the Model 3 sedan, pushing the company to the brink of collapse. This near-fatal experience led to the birth of a new venture, Atomic, which focuses on using AI to optimize supply chains. Founded by former Tesla employees Michael Rossiter and Neal Suidan, Atomic was incubated within DVx Ventures, led by Jon McNeill, Tesla's former president. Rossiter, also a partner at DVx, spearheaded a $3 million seed round for Atomic, with additional investment from Seattle-based Madrona Ventures. McNeill, reflecting on the origins of Atomic, said, "Michael and Neil experienced this pain firsthand as leaders at Tesla in the supply chain, and I saw that work first hand — because they worked for me." Atomic's goal is to enhance inventory planning for its customers using AI. Early trials have shown promising results, with one customer managing to halve their inventory while maintaining a 99% in-stock rate. This balance is crucial, as McNeill explained, "If you have too much capital tied up in inventory, you could really harm the business. And if you have too little, where you don’t have the right things in stock when the customer is ready to purchase, then you’re costing yourself big time." Atomic's initial clients span the consumer packaged goods, food and beverage, and apparel sectors, where the company has reportedly achieved a 20% to 50% reduction in inventory costs. In today's volatile market, the demand for solutions like Atomic's is high, as traditional systems struggle with uncertainty. Suidan noted, "Currently, planners will, like, lock themselves in a room for a week trying to put together different scenarios, present those back to the leadership, and get a question they weren't anticipating." Atomic's software streamlines this process by pulling data from existing documents and enabling rapid scenario simulation, a task that could otherwise take days. Rossiter and Suidan emphasize the importance of quick deployment and adaptability. Suidan remarked, "You can’t be writing a custom application for every customer. You need a flexible data model that’s generalized, that can apply to everyone, because then you can be up and running really, really quickly." This approach allows planners to have precise control over their plans, fostering a sense of ownership and confidence. Many Tesla alumni have ventured into entrepreneurship, including former CTO JB Straubel with Redwood Materials and former SVP Drew Baglino with Heron. However, Atomic stands out by not only applying Tesla-honed skills but also embodying a philosophy developed during their time at the automaker. McNeill praised their work, saying, "They built the end-to-end supply chain orchestration system from scratch" at Tesla. Suidan highlighted the transformative impact of their work at Tesla, explaining, "The way the business was planned when we started was a dozen different teams working in isolation, passing these spreadsheets around, trying to tie it together once a week to present executives some summary of a plan, and then spending most of the rest of the week, chasing our tail, trying to figure out why one part didn’t work or the other part didn’t work." Their solution not only improved processes but also changed the way the business operated daily. After leaving Tesla in the wake of the Model 3 ramp-up, Rossiter and Suidan reunited in 2023 to ponder how their transformative approach could benefit all businesses. This led to the creation of Atomic within DVx, with the ambitious goal of supporting every company that sells physical goods, as Rossiter put it, "Our ambition, our vision, is to support every company that sells physical goods."

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