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Tesla is developing a local data center in China to process vehicle data for its Full Self-Driving system, in response to U.S. sanctions limiting the transfer of AI technology to China. The move reflects Tesla’s adaptability and strategic pivot in the competitive EV market, and could boost revenue and profits. The company is facing challenges in offering the FSD system in China, but is exploring partnerships and hardware procurement options. CEO Elon Musk’s recent visit to Beijing accelerated efforts to facilitate data transfer and explore a local data center.